A study shows in which sector Berlin startups receive the most money from investors. There are significant changes compared to previous years.
The financing volume in Berlin startups has fallen significantly compared to the previous year. Lisa Kempke
All roads lead to Berlin – at least for most founders. The federal capital is considered Germany’s startup melting pot. Developments and trends can therefore be predicted by taking a close look at Berlin startups. A study by the Berlin Senate shows that the future belongs to energy startups. They receive the most money from investors’ financing pots.
According to a survey by the Berlin Senate Department for Economics, Energy and Business, Berlin startups in the energy sector received 604 million euros last year. Financiers are increasingly relying on companies with modern energy solutions. We also talked to investors about how you can found a successful energy startup and which startups in the sector you should keep on your radar.
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The energy startups are followed in terms of financing volume by the fintechs (533 million euros) and the food sector (393 million euros). However, the expert interviews in the study show that fintechs are facing major challenges. It is said that regulations and competition will make it more difficult for fintechs to successfully complete financing rounds in the future.
Financing volume in Berlin startups is falling significantly
Compared to the previous year, investments in Berlin startups have fallen significantly, as the study shows. Overall, the financing volume in 2023 was 2.9 billion euros – a full 2.6 billion euros below the total in 2022. The invested capital is distributed among fewer startups. For early financing such as pre-seed, seed and Series A rounds, the volume is 35 percent lower than in 2022. For all financing above this, the financing volume was 27 percent lower than the previous year. There were no so-called mega deals – financing of more than 250 million euros – at all in 2023. A reason for concern?
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Senator and former Berlin mayor Franziska Giffey (SPD) is still optimistic about the future, according to the study. Berlin remains the number one startup location in Germany. A decline in investments can also be attributed to increased interest rates and inflation. The startup experts also speak of a healthy financing volume in the long term. The big difference is particularly noticeable due to the high investment years 2021/2022. However, there are problems with growth capital for startups. There are too few options available here.
The numbers also show that Berlin is a German startup mecca. In terms of financing volume, the capital is still ahead of Bavaria and therefore also the second most popular location, Munich – albeit just barely. In Bavaria, the financing volume in 2023 was 2.6 billion euros. This means that the southern German state is catching up with Berlin. Compared to the previous year, the financing volume only fell by 100 million euros.
Even in a European comparison, Berlin’s financing volume is declining. Stockholm and Paris have overtaken Berlin in recent years. London is and remains the lone leader in Europe.
Are startup bankruptcies increasing?
In 2023 there was an increase in startup insolvencies in Germany. Companies are less likely to be saved. Startups had to file for bankruptcy in 297 cases – 117 more than in 2022. A record high, as the Handelsblatt writes. The experts in the study assume that individual sectors will consolidate. This year, however, there will be even more bankruptcies if they think so. This is indicated by the high capital requirements of startups. 70 percent of German startups need fresh capital in the next twelve months.
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The study was carried out on behalf of the Berlin Senate Department for Economics, Energy and Enterprises. The data comes from Startup-map.de, Dealroom, Startupdetektor, Crunchbase, Pitchbook, the Startup Association and the German Startup Monitor. Interviews were also conducted with experts and founders from the scene.
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