All data on the Munich startup scene in review 2021 come from our Data & Insights DashboardIf you want to learn more, you can also search the database yourself for further insights.
A total of €2.1 billion was invested in startups from Munich and the surrounding area last year. This corresponds to slightly less than half of the total investment volume in 2021 (€4.4 billion). While this represents a significant decline in the ecosystem compared to the previous year, the total investment volume is still significantly higher than in 2019, the last year without a crisis. Back then, Munich startups raised a total of €1.6 billion. The number of investments also declined accordingly: While there were 236 closings in 2021, there were only 197 in 2022. This also led to a decline in the average investment volume from around €18.6 million in 2021 to €10.7 million.
2022 shows problems in the seed and pre-seed phase
Numerous mega-investments were responsible for the company's performance in the record year of 2021. There were 10 financing rounds of over €100 million back then. In 2022, however, there were only four: Celonis was able to expand its Series D round by $400 million plus an additional $600 million credit line, Personio raised an additional 190 million euros in its Series E round, Kinexon closed its Series A round with 122.5 million euros and Finn secured 103 million euros with its Series B.
In contrast, there is hardly any difference in financing between €100 million and €10 million. 43 rounds of this size were completed in the Munich ecosystem last year, compared to 44 in 2021. A closer look at the average financing size, excluding mega-investments above €100 million (2022: €6.9 million; 2021: €6.3 million), reveals that Munich-based startups in the growth phase were able to secure financing almost unaffected by the crises of 2022.
Young companies are experiencing problems, especially in their early stages: the number of seed and pre-seed financings fell from 157 in 2021 to 126 in 2022. A trend that was fuelled by the declining start-up activity last year is likely to continue for a while.
The development of individual sectors
Also notable in the past year's development is the concentration of invested capital in just a few sectors. The healthcare sector leads the field, with a total of €429 million invested. In contrast, the sector ranked third last year with €599 million. The transportation sector, which dominated 2021 with a total of €1.4 billion, slipped to second place with €343 million. Third place goes to HR startups, which raised a total of €264 million (2021: €370 million). These three sectors thus account for a good half of the capital invested in Munich startups in 2022.
Although investment volumes generally declined, some sectors also recorded significant increases last year compared to the previous year. For example, the travel sector more than doubled its investment volume from €52.9 million to €136 million. The legal sector, which had seen little investment in recent years, also improved to a total of €63 million. In 2021, it received only €1.7 million. In contrast, the robotics sector (from €415 million to €80.8 million) and marketing (from €241 million to €34.6 million) suffered significant losses.
The total value of the Munich startup ecosystem continues to rise
All in all, the Munich ecosystem continued to increase its overall value in 2022, albeit at a somewhat slower pace than the previous year. Based on the total company values, the Munich startup ecosystem was valued at €53.2 billion at the end of last year. In 2021, the ecosystem was still worth €46.1 billion. However, the past year did not produce any new unicorns—startups with a valuation of over $1 billion.
Recently, the number of exits also reached a new high: A total of 33 Munich startups were acquired by other companies or listed on the stock exchange last year. Last year, the founders of 32 startups took such steps. The most sensational of these was probably the acquisition of Fazua by Porsche and the acquisition of Reflected by the US company PTC have been.
A review of the fourth quarter of 2022
The fourth quarter of the previous year brought a rather quiet end to the year in terms of financing rounds. With a total of just under €377 million raised, Q4 was the second-worst quarter of the year. The largest sums went to Holidu (€75 million), The Mobility House (€50 million), and Limehome (€45 million) (We have summarized the most important investments of the quarter here).
The number of investment rounds in the fourth quarter of 2022, at 38, was below the level of Q3 (43 financings) and the same quarter of the previous year (55 financings). The average size of the investment rounds was approximately €9.9 million. In Q3 2022, the average was €14.8 million, compared to €27.3 million in the same quarter of the previous year. This also puts the fourth quarter of 2022 slightly below the annual average of €10.7 million.
The Munich ecosystem saw a total of four fund closings in the last quarter of 2022. Golding Capital Partners launched two new funds: the "Golding Energy Transition 2022 Fund of Funds" with a total of €300 million in capital, and the "Golding Buyout Co-Investment 2020 Fund of Funds" reached its final close with €273 million. Vsquared Ventures launched a new early-stage fund with a volume of €165 million, and Munich Private Equity Partners raised €392 million for its fourth fund of funds. The newly added total investment volume is thus €1.1 billion.
