Study: German start-ups have only minor losses in investments

Better than expected: German start-ups continued to do well in 2020, according to a study. In total, more than 5 billion euros were invested, a decrease of 15 percent. The e-commerce and healthcare sectors benefited, while mobility and FinTechs saw declines.

Only in eight cases did German start-ups rake in more than €100 million in investments last year, five fewer than in 2019. The total volume invested also fell by 15 percent to €5.3 billion. Nevertheless, start-ups coped better than expected last year, according to the results of the start-up barometer of the audit and consulting firm EY. Included were companies that are less than ten years old. But caution is warranted, warns Thomas Püver, a partner at EY: "Due to the suspended insolvency filing requirement, it's not clear how things actually stand for the many small companies that are not the focus of investors and are possibly fully financed with their own funds."

EY Germany CEO Hubert Barth summarizes, "The clear winners last year were the health and e-commerce sectors, in each of which significantly higher sums were invested. On the other hand, the investment volume in mobility startups and FinTechs shrank sharply." 670 million flowed into health start-ups, 42 percent more than in the previous year. This industry thus ranks second in terms of deals, while first place, as in 2019, is software and analytics with 228 deals with an investment volume of one billion euros. That is a loss of 15 percent. Investors invested less money overall, but entered into more individual deals. This is also reflected in the record number of 743 financing rounds in total with a simultaneous loss of 16 percent of the volume.

In terms of locations, Berlin leads with 314 deals, although here too the total volume of transactions fell by 17 percent to 3.1 billion euros. The big deals were missing, EY said. Bavaria maintained its volume at 1.51 billion and even gained in the number of deals: 176 were concluded, an increase of 36 percent. The losers were clearly North Rhine-Westphalia, Baden-Württemberg and Hamburg. All three were unable to match the previous year's level. Hamburg's investments fell by a full 42 percent to 140 million euros.