Start-up investments plummet - and Habeck has bad news for business angels

The federal government is suspending a grant program for startup investors and there is less money from investors. But there is one piece of good news.

The startup world has fared better before. In 2022, German startups received significantly less capital than the year before. This was determined in a study by the consulting firm EY . According to the study, 9.9 billion euros went to German startups. That's a whopping 43 percent less than in 2021. And there was more bad news: The number of deals also went down. It fell from 1160 deals in 2021 to 1008.

Many of the problems in the industry are already well known: rising interest rates, falling valuations and cautious investors. EY's main reason for the poorer figures is that there were fewer large deals of more than €50 million. Instead of 72, there were only 37.

Nevertheless, parts of the news are still grumbling at a high level: the full-year figure is the second highest since EY began collecting this data in 2015. And there were, after all, more than 1,000 deals in a year for the second year in a row. Thomas Prüver, partner at EY, is therefore optimistic: 2022 is still "the second most successful year ever for the startup industry in Germany," he explains. "And that in a time marked by geopolitical challenges, high inflationary pressure and rising interest rates."

Despite everything, Berlin can once again rejoice: the capital's startups raised by far the most venture capital: 4.9 billion euros were invested in them last year. However: In 2021, more than twice as much was invested here as well, at 10.5 billion.

What it will look like in 2023 is completely unclear. There has already been a first damper: The German Federal Ministry of Economics (BMWK) has suspended the promotion of private investments by business angels at the end of the year, at least for a short time, as the Handelsblatt reports. A new funding guideline is planned, but has not yet been approved, it said. "We are working to ensure that the period in which applications cannot be submitted is as short as possible," a spokeswoman reportedly said. It is expected to be possible again before the end of January, she said.