2019 was a significant year for investment opportunities in Germany. According to a new EY report, over 650 German startups accrued more than six billion euros last year alone, with the second half of the year seeing a 13% increase in investment over the first. Though the numbers keep rising, one aspect remains unchanged: Berlin is leading the charge.
The German capital hosted some 262 financial investments in comparison with the second-most profitable region of Bayern (129). Even Nordrhein-Westfalen, home to bustling cities like Düsseldorf and Köln (Cologne), achieved less than a third of Berlin’s total. These figures indicate a fortuitous future for the startup ecosystem in Germany.
From Mobility to Education – The Most Successful Startup Sectors in Germany in 2019
The two largest startup investments of the year fell within the category of mobility. This sector alone received over €1.6 billion, the most profitable by far. Fintech/insurtech (the dominant category in 2018) received an impressive €1.3 billion in investment funds, whereas investors continued to pump cash into the areas of software & analytics (€1.221 million) and e-commerce (€730 million).
Beyond these the health sector had €475 million pumped into it, adtech €221 million, energy €88 million, €63 million for media & entertainment and education at the bottom with €43 million.
The report by EY also noted that the number of smaller startup deals (up to and including €5 million) increased by some 27% over 2018’s figures. As did the larger deals of over €50 million, which increased from 12 to 20 in total. But who were last year’s biggest players?
These 5 Companies Received the Most Funding in 2019
The mobility sector was the dominant force in 2019 in part due to the success of three German startups: FlixMobility, GetYourGuide and Frontier Car Group. FlixMobility, which operates FlixBus, FlixTrain and FlixCar, received €500 million in investment for scaling its business model both at home and abroad. FlixMobility works in co-operation with local transport companies and handles permits, network planning, marketing, pricing, quality management and customer service in return for their services.
GetYourGuide on the other hand received a total of €428 million to further develop its brand. GetYourGuide is an online platform where third-party companies can list their products for potential customers to find. The global inventory of this site includes tours and excursions, but in recent years has also expanded to offering classes and tickets to tourist attractions.
Thirdly we have Frontier Car Group, a startup that is usurping the once untouched marketplace of second-hand cars. With €361 million acquired in 2019, the company is ramping up its efforts in developing countries, expanding its business into Africa, Latin America and Asia. The two other startups that featured in the top five in Germany were N26 (€266 million) with its innovative banking app and Celonis (€261 million) which uses AI-driven data and process mining to help companies become more efficient.
Clearly Germany is a country that attracts startups from a variety of backgrounds. But how does the country fair on a global scale?
Germany is One of the Most Startup-friendly Countries in the World
According to CEO World, the top ten locations in the world for startups in 2019 were as follows: the United States, the United Kingdom, Canada, Israel, India, Germany, Poland, Malaysia, Sweden, and Denmark, all in descending order. Germany has featured on the top-ten list for many years now, but it still has a long way to go before it can rise above its competitors.
That being said, EY’s extensive report indicates that the startup culture in Germany is thriving in every sector. Now we just have to wait and see what 2020 has in store.
Sources: EY Report