The number of acquisitions of German startups rose from 171 in 2021 to 203 last year, according to a study by consulting firm EY. 65 acquisitions of German startups, roughly one third, were carried out by German companies. 138 German startups were acquired by foreign companies, of which 78 from Europe, 53 from the USA. The share of North American companies 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 went to companies from Asia, with the share rising from three to five percent.
Sale abroad: “a sign of how competitive domestic startups are”
Thomas Prüver, partner at EY, says:
“2022 was a challenging year, not only for startups, but for the economy as a whole. Interest rate turnaround, economic slowdown, the phasing out of pandemic effects – all of this led to valuations being corrected downward and profitability coming more to the fore.”
According to Prüver, there was not a single IPO of a German startup in 2022. In 2021 there were four IPOs and five SPACs.
“Since IPOs ceased to be an exit option for investors, M&A transactions came into sharper focus. Additionally, some startups that had difficulty raising fresh capital became acquisition targets.”
The number of acquisitions thus increased significantly compared to the record year 2021. Interest from foreign investors was particularly strong.
“A clear sign of how competitive domestic startups and their ideas and business models are in international comparison. At the same time, however, an alarm signal to policymakers, as this means much innovation potential is flowing out of Germany”,
says Prüver.
Particularly many acquired startups operate in software & analytics. 66 transactions were conducted here. In second place, with 30 acquisitions, is the e-commerce sector.
