Stagnation in green startups: Raising capital poses major challenges for green tech startups. Companies in other sectors apparently find it much easier to secure financing. This is reported by Green Economy Start-up Monitor 2017.
Raising capital is problematic: demands on politicians
As part of the project funded by the Federal Environment Ministry and the National Climate Initiative “Green Start-up Investment Alliance (GreenUpInvest)” In collaboration with the German Startup Monitor (DSM) 2017 of the German Startup Association (BVDS), data on financing conditions and challenges for GreenTech startups and non-green, innovative startups were evaluated. The results show that the future financing needs of GreenTech startups (on average €200,000) are higher than those of non-green startups (on average €35,000).
This also explains why GreenTech startups view raising capital as a greater challenge than entrepreneurs from other industries. This likely explains why the GreenTech startups surveyed primarily hope for more support from politicians in raising capital. The other startups, in contrast, primarily expect the removal of regulatory and bureaucratic hurdles. It is also striking that GreenTech startups are significantly more likely than other startups to want improved communication with politicians.
Munich GreenTech startups among the top deals of 2016 and 2017
In 2016 and 2017, the ten largest known German deals — including Lilium and tado° — a total of over €367.5 million was invested in eight startups alone. Most of these companies were in the growth phase. The green economy sectors of energy efficiency and renewable energies were the most frequently invested.
It is noteworthy that the only two companies in the startup phase are active in the field of sustainable mobility with electric multicopters and flying taxis, respectively. This indicates a high degree of innovation but also an increased risk potential. The investors are predominantly (corporate) venture capital firms, followed by private investors and private companies. These are often investors whose portfolios primarily consist of investments in the cleantech and energy sectors (e.g., eCapital, innogy SE). However, there are also conventional investors such as Rocket Internet or Daimler. The number of investors varies from two to twelve investors per deal.
In addition to deals made in Germany, international deals were also recorded. The three largest green deals identified include an investment of over one billion US dollars in the E-vehicle manufacturer NIO from Shanghai. Ayla Networks, a California-based provider of an Internet of Things platform, received another $60 million. $50 million was invested in the Israeli e-mobility company Phinergy.
Information about all past and future deals made in Germany and internationally can be found on the Startup platform StartGreen.
