Professional services network Ernst and Young (EY) says the number of financing rounds for fledgling companies in Germany reached an all-time high of 743 in 2020 despite the economic disruption caused by the coronavirus pandemic. That was an increase of six percent.
The figures were a bright spot in a year that saw the overall volume of venture capital decreased by 15 percent to EUR 5.3 billion. EY attributed that to a relatively lack of deals of EUR 100 million and upwards.
“There has been a corona effect on venture-capital investments, but in the main it was restricted to a decrease in very large deals,” said the chairman of EY Germany. Hubert Barth.
Berlin kept its status as Germany’s top VC location followed by Munich, which also more or less maintained its 2019 investment volume levels. Firms in Berlin took in EUR 3.1 billion, the vast majority of it from investors outside of Germany. The hottest sectors according to EY were health and e-commerce.
The largest transactions in 2020 in Germany were EUR 255 million for Berlin online car retailer Auto 1 Group in July, EUR 218 million for Munich air taxi developer Lilium in March and EUR 212 million for Berlin scooter renter Tier Mobility in November.
“The economic impact of the corona restrictions has hit countries around the world hard, but the fact that the number of VC investments in German-based start-ups set a new record in 2020 is very encouraging news,” says Robert Hermann, CEO of Germany’s international economic promotion agency Germany Trade & Invest. “It is a sign of the robustness of Germany as a start-up environment. If the pandemic can be definitively contained, there’s every reason to expect that large-scale VC investments will regain or likely exceed previous levels.”