In 2016, the German Tech start-up industry evolved as an integral part of the national economy. Fast-growing companies are acting as pioneers of the digital transformation across the country.

Funding, Growth and Profitability

After years of tremendous growth in funding, partly driven by a few young ventures, the German start-up ecosystem is becoming an own segment. We see a well-balanced supply of early-stage nancing contributed by VC funds, family of ces and business angels. Liquidity from recent success stories is coming back to the market and helping new ventures to develop.

We are observing a strong trend towards B2B business models and an increasing engagement of established Corporates in the ecosystem, acting as the key exit channel for founders and their early-stage investors. Going forward, a further enhancement
of the later-stage funding environment in Germany will help to make successful ventures really big before being sold in rather early stages of the development.

We consider the market development in 2016 as healthy. The German ecosystem proved to manage upcoming challenges and is well on track to nd the right balance between funding, growth and profitability.

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