Start-ups receive less venture capital – France is lagging behind Germany

Germany versus France

France has beaten Germany in venture capital for the first time in years. French start-ups get more money.

(Foto: Imago, AP, Getty)

Berlin Start-ups in Germany have been under more pressure than their French counterparts since the start of the Ukraine war and the outbreak of the economic crisis. The total amount of investments in 2022 was lower than in neighboring European countries for the first time in years. This emerges from the annual report by London-based venture capitalist Atomico on the state of the European start-up scene.

According to this, around 10.8 billion dollars were invested in German start-ups this year, while French ones received 14.6 billion dollars. That sum was surpassed only by British startups, which came to $27.9 billion, according to Atomico’s calculations.

The French start-ups thus received 17 percent more venture capital than in the previous year, when, as a result of the zero interest rate policy and the corona boom, more money than ever before flowed in almost all other European countries and unicorns were created at record speed.

The report gives few reasons for the unusual performance of French start-ups. One explanation could be that French funds managed to collect more venture capital this year than German ones in relation to gross domestic product and population.

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In addition, the proportion of young founders in the neighboring country is higher than in Germany, but also than in Great Britain, the Netherlands or Spain. The founder of French emissions-tracking platform Sweep, Rachel Delacour, blames French President Emmanuel Macron’s pro-startup policies for the progress. This includes the introduction of technology visas in France, which made it easier to attract talent.


In Germany, on the other hand, invested venture capital fell by 43 percent compared to the previous year – even more than in Great Britain. Most start-ups noticed this clearly in negotiations with their investors. Many young companies are now trying to get by with the capital they have already collected.

Investment record of 2021 unattainable

The investment record of more than 100 billion dollars achieved across Europe last year remains untouched this year. Given the macroeconomic headwinds, nearly $85 billion is expected to be invested in startups this year, according to the State of European Tech report, which is based on data from 41 European countries and an extensive survey.

The number of new unicorns has also fallen significantly compared to the previous year: While this year 31 start-ups with a company valuation of more than one billion dollars were added, in 2021 there were still 105. In total, Europe has 352 so-called unicorns – including Flix and Celonis from Munich or Trade Republic from Berlin.

IPO standstill

After a long boom, there was also a lull in the capital markets this year. In view of the devaluation of technology stocks on the stock exchanges and the great uncertainty, there were hardly any IPOs. From January to December, only two companies in the tech industry in Europe dared to go public with a valuation of more than one billion dollars. The largest IPO was the chip test provider Technoprobe from Italy with a market valuation of 4.4 billion dollars.

>> Read about this: Start-up duel between Berlin and Paris – where founders have better opportunities

In the previous year there were 25 IPOs, including that of the Berlin online used car dealer Auto1. In the USA, the decline was even more pronounced. After 61 IPOs last year, Wall Street only had one major new issue in the tech industry this year.

Women continue to play a subordinate role in start-ups

The start-up scene in Europe is still male-dominated. Little has changed in this respect in the current year. 87 percent of all venture capital in Europe was raised by exclusively male founding teams. Only one percent went to all-female teams.

At the same time, the report shows that women, on average, made less money from deals than men. In view of the high sums that flow into the start-up ecosystem, it is disappointing how little female founders benefit from it, according to the “State of European Tech”.

More: Financing for German start-ups collapse – expert warns founders of “poison pill”


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