According to a study by the consulting firm EY, the number of acquisitions of German startups rose from 171 in 2021 to 203 last year. 65 acquisitions of German startups, or about one-third, were carried out by German companies. 138 German Startups were acquired by foreign companies, 78 of which were from other European countries and 53 from the USA. The share of North American corporations in the acquisitions of German startups from abroad thus fell by 15 percentage points compared to the previous year, from 53 to 38 percent. At the same time, the share of acquisitions by European companies rose from 44 to 57 percent – an increase of 13 percentage points. The remaining seven international foreign acquisitions in 2022 were by companies from Asia, with the share increasing from three to five percent.
Sales abroad: “A sign of how competitive local startups are”
Thomas Prüver, Partner at EY, says:
"2022 was a challenging year, not only for startups, but also for the economy as a whole. Interest rate reversals, the economic slowdown, and the waning effects of the pandemic – all of this led to downward valuation adjustments and a greater focus on profitability."
According to Prüver, there was not a single IPO of a German startup in 2022. In 2021, there were four IPOs and five SPACs been.
"As IPOs became unavailable as an exit option for investors, M&A transactions became more of a focus. In addition, some young companies that had trouble raising fresh capital became takeover candidates."
The number of takeovers therefore increased significantly again compared to the record year of 2021. Interest from foreign investors was particularly strong.
"A clear sign of how competitive local startups and their ideas and business models are in international comparison. At the same time, however, it's also a warning signal to politicians, as this is draining a lot of innovation potential from Germany,"
says Prüver.
A particularly high number of acquired startups operate in the software and analytics sector, with 66 transactions completed. E-commerce follows in second place with 30 acquisitions.
