“In the second pandemic year, the German private equity market again demonstrated strength and accompanied numerous start-ups and medium-sized companies through a challenging period,” said Frank Hüther, spokesman for the board of the German Private Equity and Venture Capital Association (BVK). “After record years in 2019 and 2020, the level of investment remains high in all market segments, with growth in venture capital standing out in particular.” In total, almost 1,000 companies were financed with venture capital during the year.
Venture capital with new record
With almost 4.0 billion euros, investment companies invested more venture capital in Germany in 2021 than ever before. In 2020, the investment volume was still at 1.9 billion euros. “For the German venture capital market, 2021 was an outstanding year. The new investment record had already been set after six months,” says Mark Schmitz, Deputy BVK Board Spokesman and founder of equation AG. The main driver of this development was the large number of triple-digit financing rounds for mainly unicorn start-ups such as Celonis, Enpal, Tier, Personio, Trade Republic, Wefox, Mambu, SolarisBank or Scalable Capital. A total of around 600 start-ups and young companies, and thus 61 percent of all companies financed with equity capital in the course of the year, thus received venture capital.
Buy-outs decline after record years
In contrast, the buy-out segment developed weaker. After record figures in the two previous years of more than 11 billion euros each, this investment level could no longer be reached in 2021 with 5.5 billion euros. Despite this decline, according to BVK board spokesman Hüther, there is still a “lively buy-out activity”. “Private equity remains an excellent alternative for families and companies to continue their business independently, secure the future and grow.”
Growth in fundraising
German private equity firms raised 4.8 billion euros in new funds from investors in 2021. This is 9 percent above the previous year, but well below the previous record of 6 billion euros in 2019. While buy-out funds increased, fundraising by venture capital funds declined.
Outlook for 2022
In view of the current geopolitical situation, the BVK also finds it difficult to provide an outlook for further developments this year. The investment market will not be able to escape weaker economic growth in Europe, believes equation founder Schmitz. “However, the market foundation is basically stable due to many recently raised funds.”
The detailed, preliminary equity market statistics 2021 (data as of March 2022) including methodological explanations can be found on the BVK website (in German).