All of the following data on Munich’s startup scene comes – unless otherwise stated – from our Data & Insights Dashboard. If you want to learn more, you can also search the database yourself for further insights.
In the second quarter of 2023, Munich startups raised around 437 million euros in capital – significantly less than in Q1 (704 million euros) and in the same quarter of the previous year (803 million euros). The second quarter of 2021 also saw considerably more funding at 1.9 billion euros. However, if we compare this to the last pre-crisis spring, namely Q2 2019, the months of April to June 2023 show outstanding performance. At that time, only 33.9 million euros were raised. It should be noted that for some funding rounds no figures were disclosed, which means the final sums could be even higher.
Less money, fewer funding rounds
Large funding rounds did not dominate the capital raised this spring as much as usual. In Q2 2023, there was only one funding round over 100 million euros – the 150 million euro investment in Jolt Energy. (We have summarized the most important fundings of the last quarter here.) The differences to the same quarters in previous years become much smaller if you exclude these mega-rounds. For Q2 2023, that’s 287 million euros compared to 400 million euros in Q2 2022 and 527 million euros in Q2 2021.
In addition to the total volume of investments, the number of funding rounds continued to decline in the past quarter. It had already stagnated since Q3 2022 with 50 rounds at that time, followed by 53 in Q4 2022 and 49 in Q1 2023. With now only 42 successful closures for Munich startups, the number fell again. The level of successful investments is now as low as it has not been since Q2 2019.
However, average investment sums (excluding mega-rounds) show the opposite trend. The period from April to June this year averages 7 million euros per funding round. In the three months before that, it was only 5.2 million euros, and 5.7 million euros in the same quarter of the previous year.
American investors make a comeback
One development from the first quarter of this year is also reversing: from January to March – contrary to the usual trend – investments were carried almost exclusively with German and European capital. With 472 million euros (67 percent), the largest share of the 704 million euros raised came from abroad in Europe. German investors contributed a total of 182 million euros (25.9 percent). American investors showed unusual restraint with only 33.4 million euros (4.7 percent). This was despite three mega-rounds over 100 million euros each from Yfood, Isar Aerospace, and Integrity Next.
In the now completed quarter, American investors have again engaged more in Munich. They invested around 111 million euros in startups from the state capital and accounted for 28.2 percent of the investment volume. However, 193 million euros (49 percent) still came from abroad in Europe. German investors contributed a total of 78.5 million euros (19.9 percent).
Exits, insolvencies, and new funds for Munich’s startup scene
There has also been a lot of activity in the area of exits over the past three months. While there were no IPOs to report, there were a number of acquisitions: a total of nine startups changed hands. For example, the IT projects platform Casana was acquired by New York-based Andela, and the sustainable sportswear marketplace Planetics went to Khulula.
Insolvencies in spring affected, among others, Sono Motors – the startup filed for protective shield proceedings in May – and Banovo. According to the public portal for insolvency announcements, nine Munich startups opened insolvency proceedings from April to June, including Knister and Little Leaf.
There were three new investment funds in Munich’s startup scene in the second quarter of 2023. Afinum closed its Afinum 9 fund with 420 million euros, the HV Capital Fund IX raised 710 million euros, and Yttrium – formerly known as Digital+ Partners – filled its Digital Growth Fund II with 403 million euros.
