E&Y Figures Show VC Investment in Germany More Than Tripled in 2021
229 percent – that, according to the Start-Up Barometer of consultants Ernst & Young, was the rise in money invested German start-ups in 2021 compared with the previous year. A total of EUR 17.4 billion changed hands, as the global explosion in venture capital investment raised levels in the heart of Europe as well.
The number of deals increased by 56 percent to 1160. But the increase in size was even more notable. Eight financing rounds surpassed the EUR 500 million in 2021, compared to none in 2020. There were 33 deals of more than EUR 100 million last year in contrast to eight the previous year.
Berlin reinforced its dominance, with start-ups from the German capital raking in 60 percent of the cash (EUR 10.5 billion in 2021 compared with EUR 3.1 billion in 2020). Bavaria, with its popular capital Munich, attracted 26 percent of investment (EUR 4.4 billion compared with EUR 1.5 billion last year). Other parts of Germany lag far behind, although VC investment was significantly up in cities around the country.
E&Y start-up expert Thomas Prüver identified the reasons for the explosion in capital as new interest in potentially disruptive societal models, particular in the realm of technology, and pressure from funds seeking investment opportunities.
“There’s a lot of money on the market,” Prüver said in a statement. “That benefiting young businesses with the promise of success right now.”