HomeAnalysisNGP Capital Releases DACH Startups Decoded Report

NGP Capital Releases DACH Startups Decoded Report

NGP Capital

NGP Capital, a global venture capital firm, announced the results of its second, annual report into the DACH startup ecosystem’s investment landscape.

Comparing data from the 1st April 2023 to 31st March 2024 (Q2 2023 to Q1 2024), NGP Capital’s DACH Startups Decoded report analysed over 1676 venture-backed startups and 1748 funding rounds from across Germany, Switzerland, Austria, and Liechtenstein, to show trends in startup fundraising, dealmaking, and industry activity from across the region.

NGP Capital’s analysis reveals that while the region’s startup funding levels have dropped significantly from their 2021 peak, quarterly figures have stabilised around the $2.5-$3.2 Billion range since Q3 2022 – indicating that the market has found a new equilibrium.

The research also reveals the following key insights into startup investment trends in the DACH region:

  • AI startups are fuelling the current DACH VC boom: Funding soared 114% YoY in Q1 2024 to $1.38 Billion
  • Deeptech investment, particularly industrial tech, is also increasing: $2.23 Billion raised over the past year, with Advanced Manufacturing ($1.37 Billion), Robotics ($468M), and Computer Vision ($227M) leading the surge.
  • DACH swings to B2B: Funding disparity emerges between B2C and B2B funding trends since Q2 2022. With B2B funding exceeding $2 Billion for three quarters, while funding for B2C companies remains on a downward trajectory, with only $0.5 Billion raised in Q1 2024.
  • New startup hubs are emerging in the region, with Hamburg, Dresden, and Frankfurt experiencing substantial growth in startup activity.
  • US hiring boom for DACH startups: 25% of open positions with DACH startups are in the USA – suggesting DACH startups are expanding into the USA, rather than the UK or Europe.
  • Out of the 128,559 positions advertised by startups 31,281 (25%) have been outside DACH, and 8,310 were for positions in the USA.
  • Germany continues to dominate DACH region VC funding, with 75.2% of the total venture funding in the DACH region invested in German startups, compared with 19.6% in Switzerland, 4.6% Austria, and 0.6% Liechtenstein.
  • Local VCs still dominate: Growth stage startups continue to rely on local investors, with most international investors choosing to focus on seed stage startups.

With offices in Palo Alto, CA, Berlin, Germany, Petit-Lancy, Switzerland, Helsinki, Finland, and Shangai, China, NGP Capital backs early-stage B2B companies from Series A onwards in the U.S., Europe, Israel, and China within enterprise software, industrial tech, cybersecurity, and infrastructure. Through its $400M fifth fund launched in 2022, NGP Capital invests in companies driving the convergence of the physical and virtual. 

The full report is available here: www.ngpcap.com/insights/dach-startups-decoded-vol-2024-5-key-startup-trends-to-watch.  

VCWire

13/06/2024