Study: German start-ups have only minor investment losses

Better than expected: German start-ups also fared well in 2020, according to a study. A total of over 5 billion euros was invested, a decrease of 15 percent. The e-commerce and healthcare sectors benefited, while mobility and fintechs saw declines.

Only eight German start-ups received more than 100 million euros in investments last year, five fewer than in 2019. The total volume invested also fell by 15 percent to 5.3 billion euros. Nevertheless, start-ups coped better than expected last year, according to the results of the Start-up Barometer conducted by auditing and consulting firm EY. The survey included companies that are less than ten years old. However, caution is advised, warns Thomas Püver, Partner at EY: "Due to the suspension of the obligation to file for insolvency, it is not clear what the actual situation is for the many small companies that are not in the focus of investors and are possibly fully financed with their own funds."

Hubert Barth, Chairman of the Management Board of EY Germany, summarizes: "The clear winners last year were the health and e-commerce sectors, in which significantly higher sums were invested. On the other hand, the investment volume in mobility start-ups and FinTechs shrank significantly." 670 million was invested in healthcare start-ups, 42% more than in the previous year. This puts this sector in second place in terms of deals, with software and analytics in first place, as in 2019, 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 with a simultaneous loss of 16% of the volume.

In terms of locations, Berlin leads with 314 deals, although the total volume of transactions here also fell by 17% to €3.1 billion. There was a lack of large deals, according to EY. Bavaria was able to maintain its volume at 1.51 billion and even gained in terms of the number of deals: 176 were concluded, an increase of 36 percent. The clear losers were 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.