German start-ups raised more money last year than ever before. This is a ray of hope following the realization that the German economy has seen the weakest growth in six years. The favourable news about the appeal of German start-ups to investors can be found in the start-up barometer published by Ernst & Young. These concern companies that are no older than ten years old.
German start-up entrepreneurs were able to raise more capital in 2019 than ever before. This amounted to €6.2 billion in total. Which was an increase of more than a third (36%) compared to the previous year. Aside from that, the number of investment rounds increased by 13% to 704.
Berlin profited the most from this sum. Start-ups in the capital were boosted by €3.7 billion, divided over 262 financing rounds. This represents an increase of 41% in comparison to 2018.
However, the most growth was in Bavaria. Here, start-ups received 93% more money. In other words more than €1.5 billion. The main reason for this massive increase was mobility provider Flixmobility ( a transportation app). This company managed to raise half a billion euros – more than any other German start-up ever, as far as we are aware of.
In general, start-ups in the mobility field are on the increase, like that of Flixmobility. The same applies to software and fintech start-ups. On the other hand, start-ups in the e-commerce sector are losing momentum.
Mega deals
Another part of Germany that did well was North Rhine-Westphalia. Young entrepreneurs managed to trigger an increase of 10%, which accounted for €268 million. Baden-Württemberg scored €209 million, a threefold increase over 2018. Losers were Hamburg (-54%, €254 million) and Hesse (-44%, €73 million).
There were more funding rounds in all six top locations in 2019 than in the previous year. North Rhine-Westphalia showed the highest growth, with the number of deals increasing by 45% to 87.
Mega deals in particular contributed to the latest investment record in Germany. There were thirteen transactions that involved more than €100 million. Whereas in 2018 there were only six. Financiers from the US, UK and Asia are particularly interested in huge deals.
Europe
The German findings are in line with the prevailing trend in Europe, as was noted by KPMG in Venture Pulse. This report on global investments announced a record amount of $38.7 billion of investments in European start-ups over last year. Which is almost 40% more than in 2018. For Europe, however, there were considerably fewer business deals. That number fell from 5954 to 5016.
Interestingly enough, there was less money invested in start-ups globally, according to KPMG: US$258 billion in 2019 compared to $302 billion in 2018. The number of deals fell from 22,800 to 21,711. The Asia Pacific region in particular saw a sharp decline, from US$126 billion in 2018 to US$73 billion in 2019.
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