German start-ups experience a rain of money in the first half of the year


The money for start-ups in Germany is easy again: young companies are benefiting from a digitization boom after the corona crisis year 2020.

First a damper in the Corona crisis, now the rapid recovery: German start-ups experienced a rain of money in the first half of the year. Young companies received the record sum of 7.6 billion euros from investors – three times as much as in the same period last year and more than in 2020 as a whole. The number of financing rounds also rose sharply by 62 percent to 588, as the consulting company EY calculated.

Accordingly, more start-ups received fresh money than ever before in the first half of the year. In the past year, the pandemic severely slowed the upswing in the start-up industry and made it difficult for young companies to do business, even if the initially feared start-up death did not materialize.

“This year we are also seeing a corona effect, but in the opposite direction: financing activities and sums are exploding,” said EY partner Thomas Prüver about the study. “Above all, however, sums of money are now flowing into individual start-ups that would have been unthinkable a few years ago.”

New perspectives for innovative technology companies

The number of transactions with a volume of more than 100 million euros climbed from 2 to 15, according to the EY analysis, which is available to the dpa. The number of medium-sized financing rounds between 50 and 100 million euros also doubled to 16.

On the one hand, there is a lot of liquidity in the market that has to be invested in the low interest rate environment, explained Prüver. On the other hand, the market is recognizing completely new perspectives for innovative technology companies. “In the pandemic year, digitization took a huge step forward.” New business models would be seen with different eyes.

Start-ups are dependent on money from investors, as they usually do not initially write any profits. Funds and large companies invest capital in promising companies in the hope that their business ideas will prevail and bring them ample profits. Start-ups are seen as an important driver of innovation for the economy.

Corona destroyed the plans of many start-ups

The Corona crisis had ruined the plans of many start-ups. According to data from the state development bank KfW, around 537,000 people dared to take the plunge into self-employment in 2020, a good 11 percent fewer than in the previous year.

As in previous years, most of the money went to the start-up stronghold of Berlin. Founders from the capital collected 4.1 billion euros alone, more than three times as much as in the same period of the previous year. The number of financing rounds in Berlin climbed by 74 percent to 263. Bavaria followed in second place with fresh investments of 2.5 billion euros (previous year: 773). The number of financing rounds rose by 43 percent to 120.

Trade Republic und Gorillas

Berlin and Bavaria together account for 65 percent of all financing rounds and 87 percent of the capital invested in Germany. “The really big deals are primarily taking place in Berlin and Bavaria,” said EY. They are also the most visible German start-up locations internationally. Other federal states also recorded strong growth, but were unable to keep up with large deals – despite great efforts in many regions to strengthen the start-up industry.

For comparison: Berlin with 4.1 billion euros raised money and Bavaria (2.5 billion) are followed at a huge distance by Baden-Württemberg (307 million), North Rhine-Westphalia (171 million) and Saxony (134 million).

The largest sums in the first half of the year went to the Munich software company Celonis (830 million euros), followed by the Berlin online broker Trade Republic (747 million), whose app for securities trading experienced a boom during the pandemic. Then come the insurance start-up Wefox, Flixbus (539 million each) and the delivery service for groceries and supermarket goods Gorillas (241 million).


Source: com! professional by www.com-magazin.de.

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