German Start-Ups Notch Record VC Levels in First Half of 2021

August 2021

More venture capital is flowing into fledgling German firms than ever before – that’s the conclusion of an analysis of the initial six months of 2021 by business consultants Ernst & Young (EY).

Start-ups raised almost EUR 7.6 billion from January to June of this year – that’s more than three times the amount taken in in the same period last year and more than in all of 2020. The number of financing rounds, 588, also reached a new high, rising by 62 percent over last year.

In contrast to 2020, when the coronavirus pandemic suppressed VC investments, EY partner Thomas Prüver told reporters, the disruption caused by Covid-19 –in particular increased digitalization – is now acting as a motor for financing rounds.

“Resistance has been overcome, and people seeing new disruptive business models with entirely different eyes compared to before the pandemic,” Prüver said. He also cited current low interest rates as a factor driving investors into VC projects.

Deals are becoming not only more frequent but larger. The number of packages of over EUR 100 million increased from two to 15 from the first half of 2020 to the same period in 2021, and financing rounds of between EUR 50 million and EUR 100 million doubled.

Berlin remains the center of this trend, with the German capital attracting well over half of VC invested in Germany. Bavaria and Munich are the second most popular location. The most money – some EUR two billion – was invested in fintech/insurtech followed by software/analytics and mobility companies.

The founders of Celonis, Germany’s most valuable start-up which has received 1 billion US $ investment recently © Deutscher Zukunftspreis