The VC Investments in the first half of 2018 in one view.
31st July 2018
6 min read
The first half of 2018 is over and we have collected and prepared some data to show you which direction the startup scene worldwide, in Europe, and in Germany is heading, and how it has developed in the last six months.
Presenting our findings
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1. Worldwide development
In the first two quarters of 2018, investors have conducted 6611 deals globally with a total volume of 99 billion dollars. Both have increased compared to last years numbers. Without a big surprise, the majority of deals have been conducted in North America with a total count of 2902, worth 46.9 billion dollars, immediately followed by Asia coming in with 2255 deals valued 40.3 billion. Europe is at third place with a deal total of 1273 and an investment sum of 10.7 billion.
Last years development of deal activity in Asia and North America demonstrate large jumps with a total increase of 17%. This said, Asia is currently catching up to North America, while Europe is increasingly left behind.
Another important trend to mention is the participation of corporates in the financing of startups. While in the first half of 2017, between 27% and 28% of deals have been backed by corporates, this number increased to 30% in the first half of 2018. This shows the increase in the awareness of corporate companies towards the startup ecosystem.
In order to keep up the hope that startups still can become extraordinary good and to gain the popular “unicorn” title, here are some numbers from extraordinary performers and unicorns in the first half of 2018. For our newer readers, the definition of a unicorn is a company that is valued at one billion dollars or more.
Ranked as number one is Asia this time with 14 new unicorns in the first 6 months of 2018. North America is following with a total of 11 new unicorns (14 in the same period from last year) and Europe number of new unicorns jumped up from 1 in the first half year of 2017 to 6 in the first half of 2018. This is the highest number for Asia and Europe in the total observation period of the PwC / CB Insights Money Tree report.
2. Largest global deal
In April, selected investors transferred a total amount of 1.9 billion dollars in a later stage investment to the Chinese company Manbang Group from the internet software & service sector.
As a part of Europe, Germany is trying hard to add its part to the improvement of this negative development. On the one hand, the total number of deals in Germany has increased to a new maximum of 272 deals, which is 3% more than in the first half of 2017. On the other hand, the deal volume decreased by 7% (174 Mil. Euro less) to 2.411 Million Euro. Nevertheless, this deal volume is the second highest number in the total observation period of the EU Start-up Barometer.
The most attractive city for investments in Germany is Berlin. 45% of all investments in Germany have been allocated to Berlin-based Startups. This corresponds to a total number of 123 deals in Berlin Startups. It seems that the second placed state in Germany regarding the number of deals has slightly less attractive startups. Only 46 investments have been done in Bavaria followed by state number three: North Rhine Westphalia with a total of 29 deals conducted.
Comparing the deal volume, Berlin again is number one without surprise (1611 Mil Euro), followed by the same states as before (Bavaria and North Rhine Westphalia) with 355 Million Euro and 129 Million Euro.
Taking a closer look at the industries that receive the most fundings, E-Commerce is still the unbeaten number one with a total amount of 975 million Euro. This is partly based on the fact that both top deals of Germany are working in the E-commerce sector. But, the amount of money invested in E-commerce Startups in the last first half of the year was 387 million Euro more than this year. This decreasing trend of E-commerce investments can be taken as a first proof that other industries are catching up regarding the investments volume and likability to invest.
E-Commerce is followed by FinTech with a total volume of 396 million Euro in Germany and Software & Analytics with a total amount of 386 million Euro. Both industries have increased in their ranking compared to last years figures.
Additionally, Germany has a trend towards bigger deals. Whilst in the first half year of 2017 only 6 deals have had a volume of more than 50 million Euro, the number raised to 9 investments in 2018. Besides this development, the amount of smaller deals (up to 5 million Euro) stayed constant.
4. Largest German deal:
In January, selected investors transferred 460 million Euro to the Auto1 group, a Berlin-based car trading platform.
There has been a lot of numbers now. To make it easier to remember them, we summed some of the information up in the following graphic. There you can see the visualized amount of VC investments in the first half year of 2018 (VC investments include corporate VC investments and others).
Last but not least we would like to add some practical information for you and let you know how we produced this graphic. Unfortunately you cannot simply enter data in Excel and produce a linked graphic like within the program. Instead, we dug out our math learnings from school and put the following formula to work:
Area = 𝝅 r^2
We collected the data from several sources and summed them up. This sum (“area”) then needs to be divided by Pi (3.14). Next, the root need to be taken. Then you receive the radius of the circle.
This radius then simply needs to be multiplied with 2 and you get the result for the diameter of the circle in centimeters. Then you can add circles in PowerPoint and enter the diameter in the individual format of each circle. This is one way to create such a graphic.
Summing it all up
Please remember and keep in mind that some information is not in the same currency or that some data might not be complete. Normally, you need to collect the same data from different sources to receive the missing information and to present a graphic without mistakes.