The Venture Funding in Greater Rhine-Main has set a new record of 665 mn Euros in 2019
2019 was an amazing year for startup funding in Frankfurt and Rhine-Main. They raised collectively more than 665 mn Euros, which equals ~ 725 mn US$ or 554 mn GBP. This is a year-on-year growth of a whopping 75%! Some of it can be explained by the better coverage in the last year, but surely a large part is also due to the very impressive work of startups in the area.
CONGRATULATION to all startups who got funded!
Note: As of writing this, we are still chasing some details of 2019 numbers and we may correct these numbers upward again.
Noteworthy fundraisings in 2019
The main driver of this year's growth has been biotech companies, foremost Mainz-based BioNTech, which is looking to develop individualized cancer medicine. Not only have they been the most important driver of Venture Capital investments in Rhine-Main, but they also successfully listed on NASDAQ in October 2019. The investors so far made a good deal, as of writing this blog post, the share price more than doubled since the listing.
Another noteworthy company is Innoplexus, which is located very close to Frankfurt in Eschborn. They already raised 35 mn Euros in Venture Capital. They declared their intention to become the Google of Pharma (a search engine for scientists) and to raise an additional 40 mn Euros in additional funding.
Due to the definition of Rhine-Main for our Initiative, we include startups within approx. 2 hours drive around Frankfurt (similar to the San Francisco Bay Area). This does not match the established definition of the area but is a more realistic approach for the habits and needs of founders. Therefore also noteworthy have been the fundraisings of Volocopter (55 mn US$), Getsafe (17 mn US$), Thinksurance (13 mn Euros) and Scoutbee (10,6 mn Euros).
Fundraising over time
Especially the Q2 2019 has been very important for the year in total. It appears to form our, — admittedly, spotty data — that Q3 is not the best time for startups to close a financing round, at least in Rhine-Main.
We have seen so far that usually, there is one strong quarter. In 2018 this has been Q1 (265,85 m €) in 2019 this has been Q3 (343,07 m €). They drive the lion share of the investments, which is usually due to one or two fundraisings.
In the future we expect the fundings to get larger. One or two outsized financing rounds will become less important, but the startups have to mature a bit more before they can pull it off.
The overall picture
The number of deals we have been tracking has increased to 39 (up from 28 in 2018), and we are working hard to get more coverage.
With the increased number of deals, we are also getting a better picture of the actual financing rounds and the interest of investors in Rhine-Main, especially Mainz, Frankfurt, and Darmstadt.
The split by industry over two years
One of the points of interest is always for us to uncover trends. 2019 has definitely been a good year for investments in blockchain startups in the area, where we found 6 deals. In contrast in 2018, we found no blockchain startup investment. One of the main drivers here is the local VC Finlab AG, which has a partnership with EOS to invest in blockchain startups. Finlab is also an important investor in the German fintech scene, of which some sings can be seen below.
Note: We split fintech startups as much as we could. PropTech and InsurTech are listed separately.
Also noteworthy, startups trading with medical Cannabis have gathered interest. This may be so due to the central location of Frankfurt with great connections via airport, train, and Autobahn.
Let us see how the whole picture.
We assume the “Hightech” startups, which could also be called Deep Tech startups will get more investments. Noteworthy is here the Technical University Darmstadt, which is doing some important work to get an ecosystem started.
Note: We are providing this overview to get more of a feel where the interest of the investors is going. If we would have provided a view based on money invested, there would have been an overwhelming share of biotech and a slice of “everything else”.
We try to provide a look in the Rhine-Main area, but not everything fits in our blog. None the less we will point out noteworthy investments. The first one we would like to mention is the only listed pure-play fintech in Germany, Frankfurt-based lending Startup creditshelf. They raised a diversified credit fund, dedicated to SME financing. The European Investment Fund is the Anker investor with 30 mn Euro.
Keep to date
You can keep up to date, by following our blog here, or our Twitter account. On the social media channels, we also post on these channels content related to venture financing in the greater Rhine-Main Region.
Hashtags to follow
Have a look on Twitter for Frankfurt and the wider Rhein-Main area: #rheinmainrocks, #frmstartupscene #rheinmainstartups #frankfurtvalley or #startupradio
Jörn Menninger for the partners of RhineMain.vc