According to 'Startup Barometer' of the consulting firm EY Berlin with 263 financing rounds with a volume of 4.1 billion euros. Bavaria follows with the startup center Munich: In the first half of the year, Startups In 120 rounds, investments totaling €2.5 billion were raised in the Free State. Baden-Württemberg (€307 million in 36 rounds), North Rhine-Westphalia (€171 million in 52 rounds), and Saxony (€134 million in 19 rounds) followed far behind. The startup centers of Berlin and Bavaria thus account for more than 87 percent of the total capital raised in Germany.
“Last year, the pandemic led to a slight dampening of financing volumes,”
says Thomas Prüver, Partner at EY.
"This year, we're also seeing a coronavirus effect, but in the opposite direction: Financing activities and amounts are exploding. In the first half of the year, more startups received fresh capital than ever before. Above all, however, sums are now flowing into individual young companies that would have been unthinkable just a few years ago."
Following eight medium-sized financings in the same period last year, 16 have already been recorded this year. The number of transactions with a volume of more than €100 million rose from two in the first half of 2020 to fifteen now. However, 71 percent of the deals still involve a maximum of €5 million. According to Prüver, there are several reasons for the financing boom:
"On the one hand, there is a lot of liquidity in the market, which is looking for attractive investment opportunities in the current low-interest environment. Above all, however, the market is now seeing completely new perspectives for innovative technology companies. Digitalization has taken a huge step forward in the pandemic year. The dam has been broken, and new, disruptive business models are now being viewed with completely different eyes than before the pandemic."
“Munich has managed to establish itself as a second important location”
The really big deals are primarily taking place in Berlin and Bavaria. Of the twenty largest investments so far this year, twelve were in Berlin, six in Bavaria, and one each in Baden-Württemberg and Saxony. The largest deal of the year so far was the 1 billion dollar investment in Celonis, which made the Munich team Germany's first 'decacorn'. Thomas Prüver says:
"Berlin and Bavaria are clearly the most internationally visible startup locations in Germany. In recent years, Munich has managed to establish itself as the second most important location – thanks to specific strengths in the technology sector. Other regions are also registering growth rates, but are unable to keep pace, especially when it comes to large deals. There is every indication that this trend will continue for the time being – despite intensive efforts in many regions to improve their attractiveness to startups and investors."
