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

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

The start-up world has been better before. In 2022, German start-ups received significantly less capital than in the previous year. This is according to a study by the consulting firm EY . According to the study, 9.9 billion euros went to German start-ups. That is a whopping 43% less than in 2021. And there was more bad news: the number of deals also fell. It fell from 1160 deals in 2021 to 1008.

Many problems in the sector are already well known: rising interest rates, falling valuations and cautious investors. EY explains the poorer figures primarily by the fact that there were fewer large deals of more than 50 million euros. Instead of 72, there were only 37.

Nonetheless, some of the news is still a big complaint: the full-year figure is the second highest since EY began collecting this data in 2015. And for the second year in a row, there were more than 1,000 deals within one year. Thomas Prüver, Partner at EY, is therefore optimistic: 2022 is still "the second most successful year ever for the startup sector in Germany", he explains. "And that in a time characterized by geopolitical challenges, high inflationary pressure and rising interest rates."

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

What the situation will look like in 2023 is completely unclear. There has already been an initial setback: the Federal Ministry for Economic Affairs and Energy (BMWK) suspended the promotion of private investment by business angels at least briefly at the end of the year, as the Handelsblatt reported. A new funding guideline is planned, but has not yet been approved. "We are working towards ensuring that the period in which no applications can be submitted is as short as possible," said a spokesperson. This is expected to be possible again in January.