Investors

Germany Looks Set to Post Increased 2021 FDI Figures

Germany attracted 540 foreign direct business investments in the first ten months, only one fewer than in all of 2020 according to figures from Germany Trade & Invest (GTAI).

“There has been a lot of interest in Germany despite the lockdown in the country that stretched into May,” GTAI Director of Investment Consulting Achim Hartig told the Frankfurter Allgemeine Zeitung newspaper. “Companies consciously have Germany in their sights as a potential destination during the corona pandemic.”

The largest number of business expansions to Germany came from the United States, followed by the United Kingdom. Hartig sees a connection between the robust German FDI numbers and Brexit.

“Brexit is forcing companies out of the UK,” he said. “Often, they can’t find personnel, and then there are the customs duties and trade restrictions. With the UK having left the EU, many businesspeople from countries like India or Japan are locating their projects in continental Europe. Germany is profiting from that.”

E&Y Figures Show VC Investment in Germany More Than Tripled in 2021

229 percent – that, according to the Start-Up Barometer of consultants Ernst & Young, was the rise in money invested in German start-ups 2021 compared with the previous year. A total of EUR 17.4 billion changed hands, as the global explosion in venture capital investment raised levels in the heart of Europe as well.

The number of deals increased by 56 percent to 1160. But the increase in size was even more notable. Eight financing rounds surpassed the EUR 500 million in 2021, compared to none in 2020. There were 33 deals of more than EUR 100 million last year in contrast to eight the previous year.

Berlin reinforced its dominance, with start-ups from the German capital raking in 60 percent of the cash (EUR 10.5 billion in 2021 compared with EUR 3.1 billion in 2020).  Bavaria, with its popular capital Munich, attracted 26 percent of investment (EUR 4.4 billion compared with EUR 1.5 billion last year). Other parts of Germany lag far behind, although VC investment was significantly up in cities around the country.

E&Y start-up expert Thomas Prüver identified the reasons for the explosion in capital as new interest in potentially disruptive societal models, particular in the realm of technology, and pressure from funds seeking investment opportunities.

“There’s a lot of money on the market,” Prüver said in a statement. “That benefiting young businesses with the promise of success right now.”

Berlin Foodtech Infarm Becomes Late 2021 Unicorn

Vertical farming company Infarm has become the latest German start-up to join the coveted club of companies worth more than USD one billion. That was after a EUR 177 million round of funding.

Infarm’s business model is focused on growing produce efficiently, ecologically and near as possible to the places where it is sold. The company says it uses no pesticides and can dramatically reduce water and land usage and supply chain CO2 emissions. It also claims it can grow the same amount of food on 40 square meters as conventional agriculture can on 10,000.

“More than half of the world’s top dealers are already our customers,” Infarm co-founder Erez Galonska told business newspaper Handelsblatt. “In the beginning, we had to educate investors about food technology, agriculture, climate change, sustainability and Generation Z, which wants healthier, more nutritional and more local food.”

BlackRock Promotes Self as “Clean Energy Partner” for Germany

The Central European subsidiary of private investment firm BlackRock says it can play a key role in achieving Germany’s massively accelerated climate-protection goals.

“In Germany, too, we are putting ourselves forward as a partner for dealing with the need to transition to clean energy,” BlackRock Head of Germany, Austria and Eastern Europe Dirk Schmitz told business newspaper Handelsblatt. “In our view, this task cannot be achieved with public funds alone. There needs to be cooperation with private capital.”

Unprecedented amounts of venture capital in circulation worldwide have turbocharged investments in young companies in many countries, including Germany. Schmitz’s statement – together with BlackRock boss Larry Fink’s 2022 open letter to CEOs  – underscore a new public emphasis on sustainability at the world's largest asset manager.

At the end of last year, BlackRock pumped EUR 700 million into Munich company Ionity, which develops so-called high power charging networks for electric vehicles.

“At the moment, we’re looking more concretely at three to five further projects that together represent a volume in the billions,” Schmitz said. “They come from the renewable energy areas, for example wind farms, but other future-oriented projects may be part of this too.”

Quintet of German Start-Ups with 80-Million-Plus Financing Rounds

There was no let-up in the first weeks of 2022 in big deals involving innovative young technology companies based in Germany. Fintech took the spotlight. Here’s our bimonthly review.

Heimkapital, Munich, EUR 300 million, fintech: The biggest winner of early 2022 was Heimkapital from the Bavarian capital. The company offers homeowners the chance to raise capital by selling parts of their property. For the undisclosed investors, that idea was worth a cool 300 million euros.

Patient 21, Berlin, USD 142 million, medtech: From used cars to health services is an unusual lateral move, but that’s the one Christopher Muhr has made. The former COO of the Auto1 start-up, himself a cancer sufferer, is co-founder of Patient21. It provides a digital platform for storing patient records, thus increasing efficiency.

Vivid, Berlin, EUR 100 million, fintech: Another large-scale round of financing takes the value of this neo-bank in the German capital to over three-quarters of a billion euros. Vivid promises users not only conventional banking services but the chance to manage investments in everything from stocks to cryptocurrencies. Dutch co-founder Artem Iamanov says the fresh capital will be used to develop a “super app.”

Vay, Berlin, USD 95 million, mobility: Finding a parking spot in big cities can be a major hassle, but what if you could hire someone to park your vehicle remotely? That’s the idea behind Vay, an autonomous driving start-up from the German capital. It plans to use its newly raised funds to start commercial services in Germany’s second largest city, Hamburg.

Lendis, Berlin, EUR 80 million, home office as a service: Working from home is here to stay – that’s the thinking of this start-up, which rents office furniture, laptops and hardware to people who do their jobs within their own four walls. Lendis says it has already equipped more than 100,000 employees from 1000 companies with everything they need for the perfect home office.