Written by 14:00 Financial Centre

Frankfurt’s start-ups need more venture capital

A lot has happened in the start-up scene in the Rhine-Main region in recent years. Apart from Biontech, which is probably the most prominent example of success, the region can boast improved framework conditions. However, there is a lack of late-stage financing.

Börsen-Zeitung, 17 June 2022

The financial centre Frankfurt am Main is still struggling to help young late-stage companies make the final breakthrough. “I think start-up and seed financing has been significantly expanded here in Hesse in recent years after all,” said Helge Haase, investment director at BMH Beteiligungs-Managementgesellschaft Hessen, during a panel discussion at WM Group’s 15th Financial Centre Day. “Where we are still lacking is in being able to present the follow-up financing a little better.”

In this matter, Germany’s capital is still ahead, he said. “Many companies go to Berlin because there are simply many more early-stage and also late-stage VCs located there,” Haase said. This is expressed very clearly, for example, in the distribution of venture capital invested in this country. According to EY’s latest Start-up Barometer, more than 10 billion euros out of a total of 17.4 billion euros flowed into Berlin companies last year. A good 4 billion euros went to Bavarian start-ups. Hessian start-ups, on the other hand, were only able to raise 220 million euros. In terms of the number of funded start-ups per 100,000 inhabitants, Hesse was in fifth place in 2021, according to the analysis company Startupdetector.

He would like to see “perhaps some thought given to getting the VC landscape from Berlin a bit excited about Frankfurt”, said Haase. After all, the metropolis on the Main has certainly become an attractive location for young companies in recent years – this is how Oliver Schwebel, Managing Director of Wirtschaftsförderung Frankfurt GmbH, sees it. “We really do have a super prosperous scene,” he said, referring to numerous projects to promote the local start-up ecosystem such as the Tech-Quartier, the Futury Regio Growth fund launched at the beginning of 2021 or the digital start-up networking platform “Station Frankfurt”.

“There has been an insane shift in thinking in recent years and a lot has been added,” Schwebel said. “My appeal would be to the financial sector to consider what can be done to also participate in it themselves. Because one thing is clear: the highest returns are achieved in the areas where there are start-ups that really excel.”

Text & Graphics: Börsen-Zeitung, 17 June 2022, Page 3 (Second publication right)
Cover Image: Unsplash

Translation of the German original article by the editors

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