The Startup Barometer The management consultancy EY has evaluated venture capital investments last year and identified a rapid increase in the capital employed: Europe’s Startups secured €88.1 billion in venture capital in 8,397 financing rounds. In 2020, 6,693 rounds totaling €36.5 billion were completed. This represents an increase of 141 percent in financing volume and 25 percent in the number of deals.
Munich overtakes Stockholm
London remains the leader in terms of invested capital by a clear margin: €20.3 billion flowed into the British metropolis. Berlin ranks second with €10.5 billion, followed by Paris with €9.3 billion. Munich follows in fourth place as the strongest non-capital city with €4.0 billion. Compared to the previous year, Munich moved up one place, overtaking Stockholm, which now ranks sixth behind Munich and Bristol.
“2021 was characterized by enormous investment pressure on the part of investors,”
says Thomas Prüver, Partner at EY.
“The macroeconomic conditions of recent years have led to unprecedented liquidity in the market, which had to be invested.”
The first half of the year was even slightly stronger than the second: €45 billion compared to €43 billion. Prüver continues:
"€88 billion in venture capital is very encouraging and a promising signal for the upcoming transformation of the economy. However, measured against Europe's gross domestic product and compared to other regions such as North America or Asia, it is still far too little."
“The dynamics clearly speak in favor of Germany”
In a country comparison, the United Kingdom continues to lead by a wide margin with €31.4 billion. In 2020, €13.9 billion flowed into the United Kingdom. Germany follows with €17.4 billion (2020: €5.3 billion), followed by France with €11.6 billion (2020: €5.4 billion). The Netherlands and Sweden follow at some distance, each with €4.4 billion raised in venture capital. While the British market grew by 126 percent, the German startup sector achieved an increase in financing of 228 percent.
“Germany in particular has taken a pioneering role here and is showing growth compared to the previous year that is higher than that of all other major startup hubs in Europe,”
says Prüver.
“Even though London is still the leader due to its long history as a major financial center, the momentum clearly speaks in favor of Germany.”
