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DPA
Frankfurt
Germany’s start-up scene has emerged bruised but fighting strong from the coronavirus crisis so far, according to a study released by the EY consultancy group on Wednesday.
Despite the pandemic presenting many young companies with considerable roadblocks, the feared wave of start-up collapses did not materialize last year, thanks in part to the continuing flow of cash from investors, EY said.
In 2020, start-ups received 5.3 billion euros (6.5 billion dollars) from investors, down 15 per cent on the record year of 2019, the research found.
Major deals involving sums in excess of 100 million euros became rarer.
Nonetheless, the 5.3-billion-euro sum total of investments was still the second-largest amount seen in recent years, and the number of start-ups getting investors’ money increased by 6 per cent to a record high of 743, the EY report says.
Hubert Barth, chief executive of EY in Germany, said the pandemic had taken its toll on venture capital investments, illustrated by the decline in large deals, but that there had been more smaller funding rounds.
EY researchers did however warn that German start-ups are not yet out of the woods.
Germany has suspended the duty to file for insolvency in a bid to help businesses survive the pandemic, meaning that it is unclear how small companies without investor support are faring.
During the coronavirus crisis, EY observed a boom in funding for start-ups in the health branch as well as mobility service providers.
Meanwhile, a December report said German business sentiment improved for the month, defying forecasts that had seen it slipping for the third consecutive month.
The Ifo business-climate index came in at 92.1 points in December, compared with an upwardly revised 90.9 points in November. Economists surveyed by The Wall Street Journal had forecast a decline to 90.5 points.
Companies have turned less skeptical about the coming six months. The expectations component increased to 92.8 points from a revised 91.8 points in November, Ifo said.
“While the lockdown is hitting certain sectors hard, overall the German economy is showing resilience,” Ifo said.
Companies were more satisfied with their business situation, and the current conditions component rose to 91.3 points in December from 90.0 points in November.
The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.
Frankfurt
Germany’s start-up scene has emerged bruised but fighting strong from the coronavirus crisis so far, according to a study released by the EY consultancy group on Wednesday.
Despite the pandemic presenting many young companies with considerable roadblocks, the feared wave of start-up collapses did not materialize last year, thanks in part to the continuing flow of cash from investors, EY said.
In 2020, start-ups received 5.3 billion euros (6.5 billion dollars) from investors, down 15 per cent on the record year of 2019, the research found.
Major deals involving sums in excess of 100 million euros became rarer.
Nonetheless, the 5.3-billion-euro sum total of investments was still the second-largest amount seen in recent years, and the number of start-ups getting investors’ money increased by 6 per cent to a record high of 743, the EY report says.
Hubert Barth, chief executive of EY in Germany, said the pandemic had taken its toll on venture capital investments, illustrated by the decline in large deals, but that there had been more smaller funding rounds.
EY researchers did however warn that German start-ups are not yet out of the woods.
Germany has suspended the duty to file for insolvency in a bid to help businesses survive the pandemic, meaning that it is unclear how small companies without investor support are faring.
During the coronavirus crisis, EY observed a boom in funding for start-ups in the health branch as well as mobility service providers.
Meanwhile, a December report said German business sentiment improved for the month, defying forecasts that had seen it slipping for the third consecutive month.
The Ifo business-climate index came in at 92.1 points in December, compared with an upwardly revised 90.9 points in November. Economists surveyed by The Wall Street Journal had forecast a decline to 90.5 points.
Companies have turned less skeptical about the coming six months. The expectations component increased to 92.8 points from a revised 91.8 points in November, Ifo said.
“While the lockdown is hitting certain sectors hard, overall the German economy is showing resilience,” Ifo said.
Companies were more satisfied with their business situation, and the current conditions component rose to 91.3 points in December from 90.0 points in November.
The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction.
