Economy & Politics

Financing These are the most important locations for start-ups

So far, 2020 has been a rollercoaster of emotions for German start-ups. Despite the Corona crisis, the number of financing rounds rose significantly again in the first half of the year. Compared to the same period last year, it increased by eight percent to 360 deals, as EY found in the start-up barometer. However, the total value of the investments has fallen sharply: by 22 percent or around EUR 600 million to around EUR 2.2 billion.

Startups: more deals, less money

However, that decline doesn’t necessarily seem to indicate general investor reluctance in the pandemic. According to EY, the main reason for the deficit is the significantly lower number of major deals worth more than EUR 100 million: “In the first half of 2020, only two such deals were recorded, compared to seven in the same period last year.”

The auditors, who are under pressure because of the Wirecard fiasco, counted almost only a third as many financing rounds in June as in January. However, the investment volumes in start-ups remained fairly stable from March to June during the corona pandemic and even increased slightly in the last two months.

Software and analytics among the favorites

In particular, the software & analytics area had a positive effect on the balance sheet of the German start-ups. According to the report, most of the money was invested here, 30 percent more than in the first half of 2019. Three of the ten top deals were in this industry. In contrast, the Mobility and FinTech / InsureTech areas generated significantly less interest than in the previous year.

There were also clear winners and losers in the regions. One of the locations lost almost half of the funding sums, while the fiercest competition almost quadrupled its balance sheet.

These are the most important German locations for start-ups in 2020

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