Blockchain startups need more venture capital

Blockchain start-ups are young and small and need one thing above all: venture capital. According to a series of studies, however, this still fails too often.

275 start-ups in Germany are working with blockchain - more in absolute terms than in any other EU country. But in relation to the working-age population, that's only 4.4 start-ups per 100,000 employees, which puts Germany far down the list again. Estonia and Malta, for example, are particularly start-up-friendly. These are the findings of a series of studies by the German Economic Institute (IW) based on the data provider Crunchbase.

According to the study, the majority of start-ups that integrate blockchain technology into their product are young and small. 70 percent are less than five years old and 60 percent have fewer than ten employees. "Many of the companies do not yet have finished products, only prototypes or beta versions," says study author Vera Demary. However, she also sees movement in the start-up sector, which is closely linked to the establishment of blockchain. "If you want to promote blockchain, you also have to promote start-ups," concludes Vera Demary.

According to the IW, the sluggish development in Germany is also due to a lack of venture capital: "When it comes to start-ups and venture capital, Germany should learn from Israel and Estonia in order not to lose touch with this important technology," says IW financial market expert Markus Demary.