As the analysis “Biotech at the Tipping Point” the auditors of EY According to the report, German biotech companies raised approximately €2.56 billion through equity financing in the form of venture capital, IPOs, and follow-on financing. In addition, capital was raised in the form of convertible bonds totaling over €482 million. All in all, this represents an increase of 146 percent compared to the previous record year of 2018.
This development was particularly influenced by individual events, which in turn were strongly influenced by the coronavirus pandemic. BioNTech and CureVac, both of which have developed vaccines against COVID-19, alone accounted for more than half of the total capital raised, at €1.55 billion.
The venture capital entrusted to biotech startups totaled €882 million in 2020. This represents an increase of 84 percent over the previous year. This continues the positive trend in total VC inflows for the third consecutive year. There was already a very strong increase of 92 percent from 2017 to 2018, and a 24 percent increase from 2018 to 2019.
Germany ahead of France and behind Great Britain
In a European comparison, Germany left France far behind last year. In 2019, both countries were on par with venture capital of €479 million each, but the French biotech landscape was unable to replicate German growth. Instead, startups across the Rhine raised €386 million, even less than the previous year. Switzerland, however, moved into third place behind Germany with €402 million in venture capital. However, the Swiss' total VC value stagnated at the previous year's level. The European leader remains the United Kingdom, where the volume doubled to almost €1.1 billion.
However, this analysis once again reveals the impact of certain individual events. Without the venture capital rounds for CureVac, Germany would be at the bottom of the list compared to these four countries. The company raised a total of €560 million in venture capital in 2020.
Overall, European biotech companies raised €16.2 billion last year, representing growth of approximately 25 percent. In the US, however, the biotech industry raised $99.36 billion, nearly doubling its capital raising compared to the previous year (+90 percent).
Fewer start-ups, Munich remains a stronghold
The situation regarding new start-ups, however, is less positive. While 29 biotech companies were founded in Germany last year, the number fell to just 19 in 2020. The study cites the pandemic lockdown and the loss of In-person events for the startup scene to.
From a regional perspective, there continues to be a clear north-south divide in new startups. Bavaria (6 startups, or 32 percent) and Baden-Württemberg (4; 21 percent) account for over half of the new startups, closely followed by North Rhine-Westphalia (3; 16 percent), Berlin, and Lower Saxony (2 each; 11 percent). Saxony-Anhalt and Rhineland-Palatinate each recorded one startup. In the two leading states, startups remain strongly focused on the established strongholds of Munich (4), including its catchment areas (Wolfratshausen and Polling), and Heidelberg (2, Heidelberg and Ketsch), as well as Tübingen and Freiburg im Breisgau (Stegen).
