Private equity and venture capital in Germany

Outlook for 2017

In Germany the outlook for 2017 appears promising, whilst the market is partly slowed by continuing macroeconomic challenges. The field of investment opportunities is looking more complex.

Technology companies leveraging big data to bring new insights to industry should continue to find funding, as should artificial intelligence and cyber security companies. Life sciences companies with compelling market opportunities should also continue to attract funding. The taps are open for huge new spending on healthcare expansion, healthcare information technology and health insurance exchanges. Fintech, bitcoin and blockchain companies continue to rise.  Innovative technologies are creating new growth markets with the potential for high investment returns.

Other German regions outside of Berlin are further developing a healthy start-up eco-system and culture. The number of entrepreneurs has never been higher and venture capital inflows are rising strongly. In 2017 investors can look at a broader field of industries and business models and capture the emerging opportunities.

In 2016 a number of new VCs for every investment stage raised money to tap the full potential of the market. Besides that, family offices, corporates and PEs are entering the market with new money. Companies from every industrial sector, such as automotive, health care or consumer goods are very active in the field of company building and M&A. In times of low interest rates, investors seek alternative and worthwhile investments, with a positive impact on the VC market.

Economic policy measures also support the German VC market´s growth. Overall the (still) positive and on-going market development will ensure a high number of financing rounds and exits in 2017.

Key deals in 2016

Osborne Clarke in Germany plays a major role in venture capital and growth capital legal and tax advice. We have bases in Berlin, Cologne, Munich and Hamburg with a team of 10 lawyers focussing on venture capital and growth capital legal and tax advice and follow on M&A projects deriving from venture capital backed companies. We also provide fund structuring advice for venture capital funds, including the largest German seed fund. We regularly advise on approximately 65 to 75 deals every year.

A few recent examples are advising:

• BiscayneAmericas Advisers LLC on its EUR 9.5 million investment in abl social federation GmbH;
• BiscayneAmericas Advisers LLC on its EUR 15 million investment in NGENA GmbH;
• Highland Capital Partners on its investment in Finanzcheck24;
• Highland Capital Partners on its investment in Adjust GmbH;
• figo GmbH on the investment through Deutsche Börse;
• Number26 GmbH on in a EUR 40 million financing round;
• QD Investments on its investment in Marley Spoon and Book a Tiger;
• Moneymeets GmbH on the EUR 5 million investment through Postfinance AG;
• Accel India on its investment in Medigo GmbH;
• Spark Capital on its investment in eGym GmbH.