EY auditors counted a total of 743 financings with a total volume of €5.272 billion for 2020. Despite the decline in the past year of the coronavirus pandemic, the financing volume shows a sustained positive trend: €4.276 billion flowed into German startups in 2017 and €4.592 billion in 2018. The number of deals in 2020 even marks a record high for the number of financing rounds recorded since 2015.
In Bavaria, the investment volume of €1.51 billion was almost at the previous year's level (€1.55 billion). With 176 deals, the Free State even closed 36 percent more financing deals than in 2019. Bavaria thus defended its second place behind Berlin (€3.059 billion in 314 rounds) and ahead of North Rhine-Westphalia (€196 million in 62 rounds).
“There is a corona effect on venture capital investments,”
says Hubert Barth, Chairman of the Management Board of EY Germany.
“However, this is primarily limited to the decline in very large deals.”
The number of transactions with a volume of more than 100 million euros fell from 13 to 8 compared to the same period last year. At the same time, there were more small transactions.
“Munich and the surrounding area have a specific strength in the technology sector”
Online retail and the healthcare sector were the only sectors to benefit from the coronavirus situation last year, attracting more capital than in the previous year. Fintechs, insurtechs, and mobility startups, on the other hand, felt the most from investor reluctance. Nevertheless, the mobility sector continues to attract the most capital from investors (€1.158 billion), followed by software startups (€1.040 billion) and online retail (€976 million).
The largest transaction in Germany was a cash injection of 255 million euros for the Berlin-based Auto1 Group in July, followed by 218 million euros for the Munich-based air taxi developer Lilium in MarchThe Lilium financing was then expanded by another 29 million euros in June.
“Munich has become the second largest startup location in Germany,”
says Thomas Prüver, Partner at EY.
"Munich and the surrounding area have a specific strength in the technology sector and perfectly complement Berlin. Other German locations, on the other hand, had a relatively difficult time last year – the really big deals are increasingly being negotiated either in Berlin or Munich. This trend is likely to continue in the current year."
