Pursue
Another investment damper for start-ups
A man sits in his home office with a laptop on the carpet and works. photo
© Sina Schuldt/dpa/Illustration
A Hamburg-based company leads the German top league in risk financing for start-ups. For experts, this is proof that Berlin’s role as a hotspot for capital-hungry young companies could no longer be quite so dominant in the future.
Start-ups in Hamburg, like almost everywhere in Germany, received significantly less money this year. In the period from January to June, investors pumped a total of 281 million euros in venture capital into young companies in the Hanseatic city, around a third less than in the first half of 2022. This is the result of the latest start-up barometer from the consulting firm EY. The number of financing rounds was reduced to 27, after 38 a year earlier.
According to EY, the young company 1Komma5Grad accounted for by far the largest part of the risk capital invested in Hamburg start-ups in the first half of 2023, at EUR 215 million. According to its own account, the company is working on a central platform for Germany “that gives everyone easy access to better, cheaper installation and service for air conditioning technologies”. Together with the Berlin solar energy start-up Enpal, 1Komma5Grad is at the top of the financing rounds nationwide.
In a comparison of the federal states, Berlin remains at the top with 47 percent of the total amount invested nationwide, Hamburg is in third place with a good 9 percent, some way behind Bavaria. “Berlin is the hotspot of the German start-up ecosystem – but the lead is melting,” say the EY analysts. Young companies could also score points in other major German cities and regions. “The fact that one of the two top deals worth 215 million euros was invested in a Hamburg start-up testifies to this trend,” said EY expert Thomas Prüver according to the announcement.
Young tech companies are dependent on financial tailwinds from investors because they initially do not make any profits. Nationwide, the amount of venture capital invested fell by almost 50 percent to 3.05 billion euros. This is due to a reduced number of large deals, EY said. “In the first half of 2022 there were still 15 deals worth more than 100 million euros each, in 2023 there were only five of them,” it said.
