The number of financing rounds for German startups grew by 8 percent in the first half of 2020 compared to the same period last year, from 332 to 360. At the same time, however, significantly less money flowed: In the first six months of 2019, German startups secured 2.813 billion euros, but this year only 2.202 billion euros.
The coronavirus crisis hit the VC market in Berlin particularly hard: Investments nearly halved from €2.141 billion in the same period last year to €1.135 billion. Similar developments, albeit at a much lower level, were also seen in North Rhine-Westphalia (decline from €133 million to €60 million) and Hamburg (decline from €81 million to €26 million).
The VC market in Bavaria, however, has developed quite differently so far this year: After €204 million in the first half of last year, Bavarian startups have raised €773 million so far this year. Berlin's lead has thus shrunk from just under €2 billion last year to just €362 million. The largest investment so far this year went to a Munich-based startup: 218 million euros The air taxi startup Lilium secured funding in March. In June, the funding was then increased to almost 250 million euros expanded.
“Munich is emerging as the second major startup location,”
says Thomas Prüver, Partner at EY.
"The profile of Munich's startup ecosystem differs from that of the federal capital: Bavaria is particularly strong in the technology sector. This makes the two top German locations complement each other perfectly."
“Corona effect less massive than initially feared”
Prüver sees the slump in VC investments as an effect of the Corona crisis:
"The most obvious development is the sharp decline in very large deals: The number of transactions with a volume of more than 100 million euros fell from seven to two compared to the same period last year. At the same time, however, there were more small transactions. This means that the corona effect is less severe than initially feared."
