Like almost everyone else, Germany’s corporate-backed venture funds have tightened their belts in 2023, with total European investment by the country’s five biggest funds just $161m, down nearly 75% from $603m in 2022.
Even in the US, where German corporate-backed venture investment firms spend most of their money, deals were worth €833m this year, down 62% from a whopping $3.5bn in 2022.
But Germany's corporations and their associated venture firms are still spending money. Sifted took the five most valuable corporations in Germany by market cap and analysed the venture firms associated with them:
- Sapphire Ventures, which does not consider itself to be a CVC but SAP was once the sole LP and is now a major LP
- Deutsche Telekom
- Next 47, whose sole LP is Siemens but describes itself as independent and not a CVC
- Airbus Ventures, that has Airbus SE as an LP
- Allianz.
Together they have made 498 deals in the US and 129 in Europe.
Out of the five funds analysed by Sifted, Next47 by Siemens has been involved in the most European investment, at 35. It’s closely followed by Sapphire Ventures, with 34 European deals.
Sifted used Dealroom data along with other publicly available information to find out more.
Where did Germany's corporate-backed venture funds invest in Europe in 2023?
In 2022, the group of five firms made 13 investments into European startups, compared to 35 in US startups. In 2023 so far, there have been just six rounds, including:
- Airbus Ventures backing AI-powered drone-robotics company Quantum-Systems GmbH and autonomous drone company Verity.
- Siemens Energy Ventures backing GeoPura, which makes hydrogen-based zero-emissions fuel.
- Allianz X backing Wayhome, a fintech helping people buy homes with a 5% deposit and no mortgage.
- Deutsche Telekom backing Desquared, an organisation designing and developing digital products, and Panos.AI, a digital advisor for business process automation.
What sectors do the group like best?
Saas
Historically, the most popular sector for the five German firms was enterprise software, which accounted for 129 of deals, 25% of the total.
The more recent deals in this category include companies like Matillion, part of Sapphire Ventures’ portfolio, which offers data transformation software for cloud data warehouses.
Other companies in this category include Unmind, a workplace mental health platform, GitGuardian, a platform helping developers write more secure code, and Aforza, which develops cloud and mobile apps for consumer goods companies.
Fintech
Sifted found 30 fintech deals that the group had participated in since 2010 (though it’s important to note that fintech and enterprise software often overlap). The group has been involved in investments in high-profile companies such as:
- Neobank N26, which Allianz X invested in at its Series C and D rounds, though it has reportedly tried to sell its stake of 5% at a big discount.
- Money transfer platform Wise, which Sapphire Ventures invested in at its Series E round in 2017.
- Currencycloud, a payments infrastructure company that was acquired by Visa for £700m in 2021, which Sapphire Ventures invested in at its Series C, D and E rounds.
- Cargo.one, a booking engine for air cargo, which received backing from Next47 at its Series A and Series B rounds.
- Ubitricity, which develops and operates charging points for electric vehicles and was backed at Series C by Next47.
- And FREENOW, a car-sharing platform formed from the merger of Car2Go and DriveNow, backed by Deutsche Telekom at its Series C in 2013.
The most recent investments to be made by the group include the aforementioned Wayhome from this year, and five investments in 2021: including insurtech Clark and Yapily, an open banking provider.
Transportation:
Sifted counted 17 deals, 19% of the total, made by the group into transportation companies. They include:
Correction: This article has been updated to clarify that some of the funds mentioned in the article are not CVCs, but are independent venture funds with corporates as LPs.
