Founders and start-ups were able to score more heavily in financial terms in 2018. Overall, start-ups in Germany were able to collect the record amount of almost 4.6 billion euros last year, 7 percent more than in the previous year. The number of investments reached a new high and grew from 507 to 615, according to the startup barometer published by the auditing and consulting firm Ernst & Young (EY) on Thursday.
Berlin again defended the title as Germany’s founding metropolis. According to the startup barometer, young companies in the capital received a total of 2.64 billion euros in 247 financing rounds last year. The investment volume fell by 11 percent. The reason given by the auditors a “smaller number of mega-transactions” on the Spree. In 2017 alone, the Berlin food delivery service Delivery Hero received a total of 808 million euros from investors in two transactions.
Bavaria, Hamburg and NRW
2018 start-up companies, especially from three countries, posted significant financial growth in 2018. In Bavaria with the centre of Munich, the investment volume increased by 97 per cent to 802 million euros, in Hamburg by 138 percent to 548 and in North Rhine-Westphalia by 154 percent to 243 million. In total, there were six major transactions last year with a volume of more than € 100 million, which is at the 2017 level.
Most of the venture capital flowed again with 1.64 billion euros in e-commerce companies, but with a minus of 12 percent in the total for the online commerce sector. By contrast, the “Software & Analytics” segment posted a massive increase. Among them, the consultants summarize “highly technical business models” from the fields of artificial intelligence (AI), blockchain, virtual and augmented reality, as well as startups around cloud computing, “cyber” and big data analyzes. The investment sum more than doubled from 295 million to 670 million euros.
Fintech, mobility and real estate
The financing volume in the fintech sector (by 22 per cent to 659 million euros), by mobility startups (by 45 per cent to 427 million) and by young IT firms in the real estate industry (by 204 per cent to 184 million) also rose sharply. Investments in health start-ups declined by 39 per cent to € 316 million and to younger media companies, where cash flow dropped 75 per cent to € 73 million.
Despite many warnings, in 2018 initial ICOs (Initial Coin Offerings) appeared as a new form of financing in addition to classic venture capital deals. In total, German start-ups took on 255 such euro-denominated greens with cryptocurrency tokens of 255 million euros last year. The tendency here is already falling again: After 13 ICOs in the first half of the year, only nine transactions were registered in the second half. Three technology companies under the age of ten made the leap onto the floor, taking in IPOs totalling € 331 million. (ANW)
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Also published on Medium.