{"id":43117,"date":"2024-08-09T10:00:00","date_gmt":"2024-08-09T08:00:00","guid":{"rendered":"https:\/\/frankfurt-main-finance.com\/?p=43117"},"modified":"2024-07-31T14:23:17","modified_gmt":"2024-07-31T12:23:17","slug":"investment-volume-in-startups-grows-despite-declining-number-of-deals","status":"publish","type":"post","link":"https:\/\/frankfurt-main-finance.com\/en\/investment-volume-in-startups-grows-despite-declining-number-of-deals\/","title":{"rendered":"Investment volume in startups grows despite declining number of deals"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"43117\" class=\"elementor elementor-43117 elementor-43105\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-09a5abb elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"09a5abb\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-a75d177\" data-id=\"a75d177\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f805bbb elementor-widget elementor-widget-text-editor\" data-id=\"f805bbb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<ul><li>Total value of investments rises to EUR 3.4 billion (up 12%) in the first half of 2024 compared to the same period of the previous year<\/li><li>Number of deals, however, falls to 367 (minus 19 percent)<\/li><li>Every third euro invested in start-ups goes to Berlin &#8211; but competition for the capital is growing<\/li><li>Dr. Thomas Pr\u00fcver: \u201cEspecially startups with a focus on digital future topics are a magnet for investors\u201d<\/li><\/ul><p>Good news from the startup ecosystem in Germany: the deal volume is on the rise again. The total value of venture capital investments in start-ups grew by EUR 363 million (twelve percent) to a good EUR 3.4 billion in the first half of 2024 compared to the same period of the previous year. This is a sign of a trend reversal after investments in start-ups fell significantly in the first two half-years of 2022 and 2023. Also encouraging: the current total is the third-highest figure for a first half-year since 2015. However, there is also a dampener in terms of the number of deals: Financing rounds across Germany fell significantly again in the first six months of 2024 &#8211; by 87 deals to 367 deals ( down 19%) compared to the same period of the previous year.<\/p><p>The decreasing number of small financing rounds is particularly striking: the number of deals with a value of less than five million euros fell from 297 to 200 compared to the first half of 2023 &#8211; a drop of 33%. Deals with a volume of between five and under ten million euros also fell: from 45 in the first half of 2023 to 41 in the first six months of the current year. In contrast, the number of large deals between 50 and 100 million euros (six in the first half of 2023, nine in the first half of 2024) and deals worth more than 100 million euros (five in the first half of 2023, seven in the first half of 2024) increased slightly.<\/p><p>This is shown by the Startup Barometer of the auditing and consulting firm EY (Ernst &amp; Young). The study is based on an analysis of investments in German start-ups. Start-ups are generally defined as companies that are no more than ten years old.<\/p><p>Dr. Thomas Pr\u00fcver, Partner at EY: \u201cDespite the positive development in the amount of financing, there is still no sign of a general sigh of relief in the German start-up scene. On the plus side, the number of medium-sized and large deals has remained almost constant or even increased slightly. However, the fact that the number of small deals under ten million euros has fallen so sharply is a development that should be viewed with concern. It is certainly alarming that it is becoming increasingly difficult for very young start-ups to obtain fresh money.\u201d According to Pr\u00fcver, the cash injections in the initial phase are particularly essential for young companies: \u201cIt is precisely these deals that are needed to turn good ideas into usable products and services &#8211; and at the same time to maintain the broadest possible startup ecosystem, as the industry thrives and benefits from competition with each other, but also from the different know-how of numerous companies.\u201d<\/p><h4>Capital remains hotspot &#8211; but the competition is catching up<\/h4><p><br \/>Berlin was once again the hotspot of the German startup scene in the first half of 2024, attracting the most capital at 1.1 billion euros. However, its market share fell from 47% to just 31%. Start-ups from North Rhine-Westphalia (NRW), on the other hand, jumped to second place. They received 822 million euros in the first six months of 2024 &#8211; a significant 653 million euros more than in the same period of the previous year. They thus increased their market share from six to 24 percent. Bavarian start-ups took third place, recording a capital inflow of \u20ac577 million (down 33%).<\/p><p>This development is also evident when looking at the top deals: while startups from Berlin have dominated here in recent years &#8211; with a few exceptions &#8211; the first two places went to NRW for the first time in the first half of 2024. DeepL (online translation application, \u20ac277 million) and Black Semiconductor (semiconductors\/computer chips, \u20ac254 million) raised by far the most investor capital in individual rounds. Overall, start-ups from NRW are represented three times in the top 10 and thus just as frequently as start-ups from the capital &#8211; albeit with a significantly higher deal volume.<\/p><p>Is the changing of the guard imminent? Pr\u00fcver: \u201cOne thing remains clear: The capital remains the hotspot of the startup scene in Germany and still the measure of all things when it comes to the volume and number of deals. However, the current figures also show that numerous regions have worked in the past to expand their economic profile to include innovative startups &#8211; which is now bearing fruit. The fact that very large deals are also increasingly taking place in other federal states is good news for the German startup ecosystem.\u201d However, the sector mix of the respective city or region also plays a role here, according to Pr\u00fcver: \u201cThe sharp decline in venture capital for startups from one sector, for example e-commerce &#8211; a sector that is traditionally particularly strong in Berlin &#8211; then hits a location particularly hard.<\/p><h4>Significant investment boost for software start-ups<\/h4><p>While start-ups from the e-commerce sector raised \u20ac395 million in the first half of 2023, this figure fell to just \u20ac233 million (down 41%) in the first six months of this year. Start-ups from the software &amp; analytics sector, on the other hand, received by far the most investment capital in the first half of this year: EUR 1.1 billion and therefore EUR 334 million more (up 45%) than in the same period last year.<\/p><p>The increase in capital was even more pronounced in the hardware sector, where a total of 435 million euros in investment capital flowed in (up 257%). In contrast, start-ups in the energy sector dropped to third place: 349 million euros &#8211; 328 million euros less (minus 48%) than in the same period last year. Pr\u00fcver: \u201cStart-ups with a focus on digital topics of the future are currently a magnet for venture capital investors. However, the same still applies here: a good idea alone is no longer enough to convince investors. Investors continue to focus more on the profitability factor. Long-term growth prospects are good, but are not enough on their own. Investors want to see a clear path to profitability. Young companies must therefore continue to adapt to this and be very careful with the capital they are given.\u201d<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3432b94 elementor-widget elementor-widget-text-editor\" data-id=\"3432b94\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Source: <a href=\"https:\/\/www.ey.com\/de_de\/news\/2024\/07\/ey-startup-barometer-juli-2024\">Press Release EY from 16.Juli 2024<\/a><\/p><p>The study is only available in German.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e5fe557 elementor-cta--layout-image-left elementor-cta--skin-classic elementor-animated-content elementor-bg-transform elementor-bg-transform-zoom-in elementor-widget elementor-widget-call-to-action\" data-id=\"e5fe557\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"call-to-action.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-cta\">\n\t\t\t\t\t<div class=\"elementor-cta__bg-wrapper\">\n\t\t\t\t<div class=\"elementor-cta__bg elementor-bg\" style=\"background-image: url(https:\/\/frankfurt-main-finance.com\/wp-content\/uploads\/2024\/07\/ey-startup-barometer-juli-2024.jpg.rendition.3840.2560-scaled.jpg);\" role=\"img\" aria-label=\"ey-startup-barometer-juli-2024.jpg.rendition.3840.2560\"><\/div>\n\t\t\t\t<div class=\"elementor-cta__bg-overlay\"><\/div>\n\t\t\t<\/div>\n\t\t\t\t\t\t\t<div class=\"elementor-cta__content\">\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<h2 class=\"elementor-cta__title elementor-cta__content-item elementor-content-item\">\n\t\t\t\t\t\tEY Startup Barometer July 2024\t\t\t\t\t<\/h2>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-cta__description elementor-cta__content-item elementor-content-item\">\n\t\t\t\t\t\tThe German start-up scene saw a positive turnaround in the first half of 2024.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-cta__button-wrapper elementor-cta__content-item elementor-content-item \">\n\t\t\t\t\t<a class=\"elementor-cta__button elementor-button elementor-size-\" href=\"https:\/\/www.ey.com\/de_de\/forms\/download-forms\/2024\/07\/ey-startup-barometer-juli-2024\">\n\t\t\t\t\t\tDownload now \t\t\t\t\t<\/a>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8c315e1 elementor-widget-divider--view-line_icon elementor-view-default elementor-widget-divider--element-align-center elementor-widget elementor-widget-divider\" data-id=\"8c315e1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span 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class=\"elementor-share-btn__title\">\n\t\t\t\t\t\t\t\t\t\tLinkedIn\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<div class=\"tmnf_excerpt\"><p>The German startup market presents a heterogeneous picture in the first half of 2024: While the volume of venture capital investments rose by twelve percent to 3.4 billion euros, the number of financing deals fell by 19 percent. This indicates a change in investment dynamics, with large deals increasing but smaller financing rounds decreasing.<\/p>\n<\/div>","protected":false},"author":7,"featured_media":43118,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[195,105],"tags":[],"class_list":["post-43117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fintech-frankfurt-am-main","category-top-news"],"acf":[],"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/posts\/43117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/comments?post=43117"}],"version-history":[{"count":4,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/posts\/43117\/revisions"}],"predecessor-version":[{"id":43225,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/posts\/43117\/revisions\/43225"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/media\/43118"}],"wp:attachment":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/media?parent=43117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/categories?post=43117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/tags?post=43117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}