Private Equity and Venture Capital in Germany

Outlook for 2018

In 2017, the German investment landscape recovered from the struggles it encountered in 2016. Total VC-investment value increased by 88% compared to 2016 to almost €4.3 billion, surpassing the previous record value from 2015 by 29%. The total number of VC-financing rounds in Germany in 2017 scaled up by 5% to 507. This means that more companies have received fresh venture capital than ever before. Moreover, this development is proving to be sustainable, as 2017 provided the fourth and fifth consecutive six-month periods with a total number of well over 200 financing rounds.

This positive development is driven by a widespread favourable investment climate in the EU as the total number of VC-financing rounds in the EU increased by 35 % and the total investment capital in European start-ups rose by 39%.

Berlin stands out as a focal point of the German start-up landscape.  Berlin based start-ups accounted for 46% of all VC-financing rounds recorded and 69% of total VC-investment capital 2017 in Germany was raised by start-ups in Berlin.

Generally, there has been a trend towards larger-volume financing rounds. Whilst the number of small and medium-sized deals (up to €10 million) rose by 15 % compared with the previous year, and the number of larger deals (€10 to 50 million), rose by 17 %. The number of large deals (more than €50 million) has almost doubled.

For 2018 analysts predict further growth in the VC-market, with an increased amount of money being invested into blockchain start-ups. Also funding via ICOs will become more and more important.

Key Deals in 2017

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 12 lawyers focussing on venture capital and growth capital legal and tax advice and follow on M&A projects derived 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:

• Arvato Financial Solutions on its two-digit million amount financing of solaris-Bank AG
• Deutsche Telekom Capital Partners on its investment in Fornova
• Raine Ventures on its investment in Dojo Madness GmbH
• Klöckner & Co. SE on its investment in BigRep GmbH
• Sensera Limited on the acquisition of Nanotron Technologies GmbH
• Verve Wireless, Inc. on the acquisition of matchinguu GmbH
• eCAPITAL on its investments in videantis GmbH and RIPS Technologies GmbH
• machtfit GmbH on its Series A Financing Round
• Electric Mobility Concepts GmbH on its Series A Financing Round
• MoBerries GmbH on its Series A Financing Round
• Investment Bank of the State of Brandenburg on the Synfioo GmbH
• Preventicus GmbH on its Series B Financing Round
• HRTBT Medical Solutions GmbH on its Series A Financing Round