Investment in startups in Germany fell sharply last year

Investments received by startups in Germany decreased by 43 percent to 9.9 billion euros last year in 2021.

Auditing and consulting firm EY has published its report on startup investments in Germany.

According to the report, the investment collected by startups founded by new or young entrepreneurs in the country last year decreased by 43 percent compared to 2021, reaching 9.9 billion euros. In 2022, the number of investment processes was recorded as 1,008 with a decrease of 13 percent.

While startups in Germany were growing rapidly, taking advantage of the cheapness of money and the acceleration of digitalization in the Kovid-19 period, they received a total investment of 17.4 billion euros in 2021.

Investors had difficulties accessing finance last year due to rising interest rates, the Russia-Ukraine war and uncertainty surrounding the economy.

Hubert Barth, one of the partners of EY Germany, said, “With investments totaling 10 billion euros, 2022 will be the second most successful year ever for startups in Germany. These investments are marked by geopolitical challenges, high inflationary pressure and rising interest rates. He came on time.” used his words.

Barth noted that as the cost of capital rises and the valuation of start-ups declines, investors place more emphasis on profitability than promises of long-term growth, and that young companies should align with this and show a clear path to profitability.