Enlarge image
Wefox founder Julian Teicke: The insurance fintech has already had several financing rounds in the millions
Photo: Luca Fasching / wefox
Around one billion dollars for the Munich software company Celonis, around 900 million dollars for the online broker Trade Republic and another 650 million dollars for the insurance fintech Wefox - these are just three of the many financing deals in the German start-up scene that are in the made headlines in the past few months. More than ever before, fresh money is flowing into young companies in this country, which are thus driving their growth. An increase in investment volumes has been observed for years. The events in the market for venture finance in this country this year put the previous years in the shade once again.
Figures from the analysis company PitchBook show: In the first few months of this year, investors invested a total of 6.1 billion euros in up-and-coming company start-ups in Germany. This has already reached the total that was below the line at the end of December last year (see graphic). According to PitchBook, the money in 2021 will be spread over only 391 financing rounds. In the previous year, the same amount was accounted for by a total of 730 deals. The individual investments have almost doubled in size on average.
But from whom do all these billions come from?
Who are the investors who are fueling the German start-up scene with their financial injections?
An overview also provided by PitchBook shows: By far the most active investor in the local venture finance market is - in short - the public sector.
Four of the ten top investors in Germany alone have a state or semi-state background.
Above all: The High-Tech Gründerfonds (HTGF) based in Bonn, a financing vehicle founded in 2005 by the Federal Ministry of Economics, KfW Bank and various private companies such as Altana, BASF and Lanxess.
Four of the ten top investors with a state background
The HTGF currently has a volume of around 900 million euros - divided into three divisions - and participates in "young and promising technology companies that can implement promising research results entrepreneurially", as it says on the website.
The fund focuses on hardware-related engineering, life science, chemistry, material science, software, media and the Internet.
Those responsible at HTGF have already injected money into local start-ups a total of 19 times this year - more often than any other investor.
A comparison of the investors on the basis of the volumes that flowed in the individual deals is difficult, because the investment sums are usually not publicly broken down by the involved financiers.
However, the HTGF informs on its website: Over the years it has already financed more than 600 companies, more than 100 of which have already been successfully sold or floated on the stock exchange.
All in all, almost three billion euros have flowed into the portfolio companies in this way to date, according to the HTGF.
Other investors with a state background among the current top ten venture financiers in Germany are:
IBB Beteiligungsgesellschaft, headquartered in Berlin, behind which the Investitionsbank Berlin stands, and through which funds from the federal government, the federal states and the European Union flow into the start-up market
Bayern Kapital, a subsidiary of LfA Förderbank Bayern
Coparion, a vehicle founded in 2016 by the Federal Ministry of Economics and KfW Bank, to which start-ups can turn if their money needs go beyond the scope of the HTGF
According to the figures from PitchBook Data, the most important purely private-sector investors in Germany's start-up scene are HV Capital and b-to-v Partners.
HV Capital was launched in 2000 by the publishing house Holtzbrinck and, according to its own information, has been operating as an independent investment house since 2010.
The company has prominent names such as Zalando, Delivery Hero and Flixbus on the list of its reference investments.
Today, 1.7 billion euros from HV Capital are in around 200 young companies - more than 100,000 new jobs have already been made possible by the commitment of the finance company, according to the website.
b-to-v Partners has also been around since 2000. The company has so far set up nine finance funds and currently manages a portfolio of around 510 million euros.
And also noteworthy: b-to-v Partners is not based in Germany but in St. Gallen in Switzerland.
Traditionally, foreign investors have tended to stay away from local start-up events for years.
That has only changed recently: because, for example, the valuations of start-ups in the United States are now too high for many US investors, they are looking for investment targets elsewhere - for example in Germany.
Conversely, the local start-up scene is gradually opening its long-closed networks to new contacts from all over the world.
Sequoia Capital, headquartered in California, recently opened a branch in London.
The same applies to Lightspeed Ventures, which like Sequoia is headquartered in Menlo Park, California.
Financiers such as Sequoia and TVC Capital (headquarters: San Diego, USA) are now regularly on board for large financing rounds such as the latest capital injections for Celonis, Trade Republic or Wefox.
Nevertheless, there is still room for improvement: A look at what is happening at the European level shows how far foreign investors are still avoiding the German scene:
The overview makes it clear that venture financiers from Ireland, Great Britain and the USA, for example, are extremely active on the old continent - but much less so in Germany.
The flood of money over the past few months has changed little in this regard.
cr
