The Impact of Corona on the German Startup Ecosystem: Part 2

Nine months ago we first dedicated a blog article to the impact of Corona on the German startup ecosystem You might call us naïve now, but at first we actually assumed that the virus would be out of our lives by the end of the year. Well, we all know that’s not the case and probably will not be for a long time to come.
It’s time to take a look at how startups experienced the past year and whether a conclusion on the side effects of Corona can already be drawn. Up until now, there are no detailed reports or studies about the overall impact of Corona on German startups available. But the recently published Startup Barometer by EY offers some first insights regarding startup investments in 2020.

Investments

A clear Corona effect can be observed with regards to investments. Across Germany, the number of financing rounds last year rose significantly compared with the year 2019: by 39 deals or around 6%. But with that being said, the total value of these investments decreased significantly: by 15% to around €5.3 billion. This means: fewer large but more smaller investment rounds were concluded in 2020.

Geographical hotspots

Berlin once again proved to be the hotspot of the German startup scene. With 314 investment rounds in 2020, the capital made up for 42% of all investment rounds nation-wide. Bavaria follows in second place in terms of number of deals. North-Rhine Westphalia and Hamburg follow in third and fourth place.

Industries of interest

As in the previous year, most of the money invested went into the mobility segment. Three of the top 6 deals were recorded in that area (Tier Mobility, Lilium and GetYourGuide). The software and analytics sector follows in second place. However, both industries received less investments than in 2019 which brings us to the true ‘Corona winners’ of the startup ecosystem in Germany: e-commerce and the health sector recorded a significant growth in investments compared to the year before. Overall, didn’t we all go crazy about ordering toilet paper online while waiting for the vaccination, saving us from further lockdowns and living our lives in sweatpants?

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