All data on the Munich startup scene in our 2023 review comes from our Data & Insights Dashboard. Anyone wanting to learn more can search the database themselves for additional insights.
1.9 billion euros were invested in Munich startups last year – roughly 300 million euros less than the previous year. Munich’s young companies received less money only in the coronavirus year 2020, when just 1.3 billion euros came together. But while the total sum of investments stagnated, the number of financing rounds declined significantly. From 280 investment rounds in 2022, the figure fell to just 190 in 2023. To find a year with fewer successful financings, you’d have to look back quite a bit: the last time the figure was below 2023’s level was in 2017 with 148 closings. The low number of investment rounds also led to an increase in average investment volume. While there were around 7.9 million euros per financing round on average in 2022, in 2023 it was roughly 10 million.
Investors become more cautious, not stingier
A look back at the year’s mega-investments – financing rounds over 100 million euros – reveals another trend. While four startups managed to convince investors of such sums in the previous year, five succeeded in 2023 despite the more difficult economic situation: The defense tech startup Helsing received 209 million euros in its Series B, Egym secured 207 million euros, Isar Aerospace received an additional 155 million euros with its Series C, the charging infrastructure startup based in Munich and Dublin Jolt Energy raised 150 million euros, and Integritynext brought in 100 million euros.
The picture is different for financings between 100 million and 10 million euros. In the Munich ecosystem, 31 rounds in this size range were completed last year – 46 in 2022. Looking at the average financing amount excluding mega-investments over 100 million euros (2023: 7.6 million euros; 2022: 5.2 million euros), it becomes clear: Munich startups in the growth phase had a significantly harder time convincing investors in 2023 – but when they did succeed, those investors opened their wallets wider than the year before.
Looking at financings under 10 million euros reveals a clearly negative trend: while 201 startups in their founding phase were able to secure financing in 2022, only 129 young companies managed this in the last 12 months. The total amount fell from 176 million euros (876,000 euros per investment) to 141 million euros (1.1 million euros). Here too, the review shows that investors tended to become more generous, provided they invested at all.
American investors withdraw
The invested funds came primarily from Germany and Europe last year. US investors were significantly less active than in previous years. While their share of total financing volume was 34 percent in 2022 (752 million euros), it shrank to around 22 percent (414 million euros) in 2023. The share of German capital increased slightly from 29 percent to 32 percent (2022: 638 million euros; 2023: 610 million euros).
However, European investors at least partially compensated for the loss of US funding, as the review shows. Their share increased from 23 percent in 2022 (496 million euros) to 41 percent in 2023 (787 million euros). Asian investors, generally more cautious in Munich, largely ignored the capital city’s startups last year. While they contributed 132 million euros (6 percent) in 2022, in the last twelve months it was just 3.9 million euros (0.2 percent).
Review: Development of individual sectors
Looking at the development of individual sectors in the review highlights the importance of individual champions in an ecosystem where the number of investments is declining. For example, the “Security” sector was able to attract the largest share of invested capital in the past year with 31 million euros. The bulk of that, 209 million euros, went to a single startup: Helsing. In the previous year, the security sector received just 61.9 million euros, ranking it 11th in 2022. A similar picture emerges in the “Wellness & Beauty” sector: ranking 13th in 2022 with 40.8 million euros in total financing, the sector lands in 4th place this year with 209 million euros. The decisive factor in this development is solely the 207 million euro investment in Egym.
The traditionally strong sectors in Munich – Enterprise Software, Transportation, Health, and HR – had to tighten their belts last year. Only the Transportation sector, which ranked third in 2022 with 341 million euros, managed to improve. 314 million euros in investment volume secured it the second rank. Enterprise Software startups experienced a lean year. In 2022, with 638 million euros, they were the darlings of investors ahead of all other sectors (though around 360 million euros went to Celonis), but in 2023 they had to settle for 127 million euros and 7th place. The Healthtech (2nd place in 2022 with 360 million euros, 11th in 2023 with 71.9 million euros) and HR sectors (4th place in 2022 with 267 million euros, 19th in 2023 with 9 million euros) also suffered losses.
The total value of the Munich startup ecosystem continues to grow
Despite the difficult situation, the Munich ecosystem continued to increase its total value in 2023. Measured by the sum of company valuations, the Munich startup ecosystem stood at 58.7 billion euros at the end of last year. In 2022, the ecosystem was worth 52.6 billion euros. With Helsing, the past year also brought forth a new unicorn – a startup with a valuation exceeding 1 billion dollars.
The number of exits barely changed; overall, 37 Munich startups were acquired by other companies last year. However, none were taken public. In the previous year, founders from 36 startups took such steps. The most notable acquisitions were probably Franka Emika, Magazino, and Chatchamp. (We’ve also summarized the year’s exits in this article.)
A review of the fourth quarter of 2023
The last quarter of the past year was disappointing. Startups in and around the capital raised just 359 million euros – less than they have in a long time. There were fewer investments last in Q1 2022, the quarter when Russia attacked Ukraine. The same quarter the previous year reached 452 million euros. It should be noted for all periods examined that some financing rounds did not disclose figures, so the final sums could be even higher.
There were no investment rounds over 100 million euros, same as in the previous year’s quarter. The highest amounts went to Quantum Systems with 63.3 million euros, Scalable Capital with 60 million euros, and Tacto with 50 million euros. (We’ve summarized the most important financings of the past quarter here.)
The number of completed financing rounds continued to decline in the fourth quarter. Only 40 startups managed to convince investors in autumn. In the same quarter of the previous year, there were still 60. Since then, the number of successful financing rounds for Munich startups has steadily declined. The average investment sum reached around 9 million euros in the fourth quarter; in Q3 it was 13.9 million euros with mega-rounds, 4.6 million euros without financing rounds over 100 million euros.
Exits, insolvencies, and new funds
In terms of exits, the fourth quarter had quite a bit to offer. Robotics specialist Franka Emika was acquired by robotics solutions provider Agile Robots, Moleqlar bought Munich biotech Epiqmax, Munich creative platform Sessions sold to Triviar, fintech startup Betterfront was acquired by Equation, and femtech startup Femfeel went to Medice Health Family. There were no IPOs in this quarter.
Insolvencies in autumn hit Noyes Technologies, Cesonia, and Smart4Diagnostics, among others. In total, four Munich startups had to report insolvency in Q4, four fewer than in the summer. (We’ve summarized more on the quarter’s insolvencies here.)
The Munich startup ecosystem saw seven new investment funds in the fourth quarter of 2023. Among other things, Acton Capital launched the new Acton VI fund, equipped with 225 million euros for proven business models in the early growth phase. Hi Inov, EOS Partners, Nordwind Growth, Liberta Partners, Generations Fund, and Vanagon Ventures were also able to successfully raise capital.
