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Was 2020 good or bad for the start-up world? The experts did not agree until the end. Many founders proudly reported that the corona pandemic had caused a real hype for their companies. Because people have finally changed their behavior, they would shop more online – and get used to paying with their smartphones, for example. Other observers were more concerned: They feared that investor money would no longer flow for fear of the consequences of the pandemic – there was talk of a possible “ice age”. The federal government also provided corona aid for start-ups.
In the end, both of them were probably right. In the last few weeks before the end of the year, there was a real run of funding for German start-ups, but many founders confidently report difficult negotiations with their sponsors. And business is actually doing extremely well in some industries, such as investment apps. But for others, the prospects are also bad in the coming months.
What will the German start-up scene do in the coming year? Capital dares to make some predictions:
Germany will not experience any “IPO mania”
In the USA, several digital stars are currently flooding the stock exchange, a real “IPO mania”. The price of the accommodation platform Airbnb exploded on the first day after the initial public offering. The gaming provider Roblox even postponed its IPO for the time being because it found pricing too difficult in the highly heated market.
In Germany, the auto trading platform Auto1 is in the starting blocks. Celonis from Munich is also a candidate, the software company has grown strongly in recent years and software providers are currently rated highly. About You is also available from online retailers Reports about a possible IPO.
The big IPO mania will not happen because a number of German hopefuls come from the travel industry: the long-distance bus provider Flixbus, the travel platform Omio, the tour platform Getyourguide and Tourlane. You now have to show that demand for the pandemic is picking up again before an IPO makes sense. It is still too early for other digital stars: for example the personnel software Personio, the remote maintenance provider Anydesk or the banking start-up N26. Its founder Valentin Stalf recently signaled that he wants to wait a few years before going public.
Travel startups will continue to have problems
The medium-sized start-ups that are dependent on the travel industry in particular will not have an easy time in the coming year. Investors currently shy away from hearing the word “travel”, says an insider. If these firms need money in the coming months before they can show a recovery, they have a problem. This actually gives lenders the chance to invest in good companies that are now having to go down with their company valuations. But start-up investors rely heavily on trends – and many want to wait and see whether travel behavior will change in the long term.
A new online trade will arise
Many start-up investors had already written off the topic of e-commerce. Because the big business fields were occupied by players like Amazon or Zalando. Now there is a next wave: Driven by the model Gopuff from the USA, a new trend is spreading in Europe in which groceries are delivered to your home – and that within a very short time window. The Berlin start-up Gorrilas has just received 36 million euros for it, about six months after it was founded.
A few years ago there was already a hype about a similar business model, especially fueled by the Berlin company Gobutler. One of the Gobutler founders is now involved in the new attack. At that time the business could not be operated profitably, Gobutler had to give up. Similar questions now arise again. The high demand will certainly decrease again after the corona pandemic. It remains to be seen whether the delivery models will still pay off. Too often it has been shown that business models that work in the US don’t necessarily go through the roof in Europe.
There will be more Moonshot funding
In 2021, more start-up founders will dare to tackle the really big issues. A major financing round is likely to be imminent for the air taxi start-up Volocopter. The rocket manufacturer Isar Aerospace has just received EUR 75 million from very traditional German start-up investors. Marvel Fusion is working on a fusion power plant with money from Susanne Klatten and venture capitalist Blueyard. Similar ambitious projects will be able to announce large financing rounds in the coming year.
Female finance will boom
The financial sector has long neglected women as a target group, a majority of equity investors are still male, in Germany it is almost two thirds. New start-ups are entering the market that want to reach women with marketing and presentation. Fina from Berlin and Jefa from New York are just two examples. Start-up investors are talking about one of the big fintech trends of the coming year. (A detailed report appeared at Finance Forward.)
The trading boom will be over
In the corona pandemic, millions of people started trading stocks. Apps like Robinhood or Trade Republic from Berlin have gone through the roof – with the providers it is possible to buy and sell via smartphone and the fees are almost completely eliminated. However, experts disagree on whether the boom will continue. It is likely that activity will decline. Nevertheless, the number of stock traders is increasing, also in Germany. They will increasingly use products like ETF savings plans. That will give the young industry a boost.
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