[iito] Business Intelligence / Kääb, Georg [ Itranskript ]. (11/13/24). "[LSG] Newsletter Special Issue: DACH Region Seed Financings 2020–2024. A List of 104 Deals with Comment & Analysis by Georg Kääb". Bremen & München.

	Region	Germany
	Organisation	[iito] Business Intelligence
	Organisation 2	Biocom Interrelations GmbH
	Group	Biocom (Group)
	Product	LIFE SCIENCES
	Product 2	Life-Sciences-Germany.com – [LSG] The Life Sciences Web Portal for German-speaking Europe
	Person	Kääb, Georg (Biocom AG 202109– Managing Editor of \|transkript before GoingPublic + BioM)
	Person 2	Lippold, Marcus ([iito] Business Intelligence 2002–)

[LSG] Newsletter Special Issue:

DACH Region Seed Financings
2020–2024

A List of 104 Deals with Comment & Analysis by Georg Kääb, |transkript

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DACH Region Seed Financings since 2020

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An introduction, comment and analysis by Georg Kääb, Managing Editor of |transkript
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Seed Financings in the DACH Life Sciences Are Going Strong

A joint data survey by BIOCOM and [iito] Business Intelligence shows an upward trend in seed financings for start-ups in the fields of biotechnology (pharma + food) and digital health applications (digital health) in Germany, Austria and Switzerland. This is in contrast to the mood, where some people call it an investor winter. In particular, the financing of start-up projects in Germany has already tripled compared to the previous year to a total volume of almost €100 million in 2024 so far.

The vast majority of all seed deals covered in this review over the past five years (63 out of a total of 104) are in the single-digit million euro range, most of them up to a maximum of 5 million euros (53). There are only nine financings in the €10-20 million range, including drug developers, platform companies and a foodtech. Within the deal size range of €6 - 10 million, ten companies were able to complete a successful seed financing round over the entire period. As expected, the majority of these larger volumes came from drug development, but two foodtechs (Protein Distillery and Cambrium) also fall into this category. The two Austrian digital app and IT developers xund and Flinn.AI as well as the Austrian pathology AI company Allcyte, which has since been acquired by Exscientia, also fall into this category.

In Austria, [iito] identified 18 seed deals, in Switzerland 25 seed investments and in Germany a total of 61. Among the 25 deals in Switzerland, however, there is an above-average number with a high volume: more than a third of all Swiss seed deals have a volume of CHF 5 million or more. Five deals even had a double-digit volume (over CHF 10 million). In Germany, which is significantly larger in terms of the number of seed financings, there were ‘only’ five deals in the double-digit range (Protein Distillery, Disco Pharma, Fundamental Pharma, Reliant AI (US/DE) and Booster Therapeutics). The vast majority of German early-stage financings remain below or at the €3 million mark (40 out of 61).

Comparison by Country 2020 – 2024

In the years 2020 - 2024 (ongoing), seed financing for Austria and Switzerland is only really weak in 2023. Here, the two Alpine countries do not significantly exceed €5 million in financing each. This slump is a little bit bitter as there was steady growth in deal volumes between 2020 and 2022, with particularly strong growth in both countries from 2021 to 2022. Austria more than tripled its seed volume from around €6.4 million to over €19 million, while Switzerland saw a significant increase of 50 per cent from 2021 to 2022, from just under €30 million to the DACH-wide peak of over €45 million. This is more than impressive for ‘little’ Switzerland compared to ‘big’ Germany with around €32 million in seed funding in 2022. (A/2021: €6,4 million vs. A/2022: €19.4 million; CH/2021: CHF 30.6 million vs. CH/2022: CHF 45.2 million). Last year, however, there was a great deal of disillusionment and restraint in both Alpine countries.

Germany is quite different. Here, seed financing volumes increased relatively continuously in the years 2020 to 2023 and, even in the ‘biotech winter’ of 2023, companies raised over €36 million in 14 seed deals, even surpassing 2022. The German start-ups of these years have a broad technological base with slightly more activity in the field of digital health, but also food techs and only a few early drug developers. Despite all the lamentations and worries about inflation, a look at the current year 2024 is particularly astonishing: here, the German start-up scene tripled its volume compared to 2023 to over €99 million. In the [iito] records, which are based on a very broad database, this is an absolute record year for founders. And also a big exclamation mark; questioning what is generally described as an economic crisis in Germany. How are neighbouring countries holding up? Switzerland seems to have clearly overcome the setback of 2023 in 2024 with around €13.7 million to date, while Austria is already much stronger in terms of seed financing in the first 10 months of the year than in 2020 and 2021 and is approaching the double-digit million range again.

Looking at the total seed financing figures for the past five years, the year 2022 stands out as a strong outlier. At that time, however, it was the Swiss start-ups that accounted for almost half of the total volume of €95 million in the three countries alone. Last year, the overall figures were similar to those in 2020 and 2021, with the largest share also coming from Switzerland in 2021. In 2024, the start-up scene in Germany, which was not exactly perceived as a driving force in Europe according to the last five years, was the decisive factor in achieving a total value of €120 million: 80% of this was contributed by German start-ups. And some more weeks of dealmaking are still ahead.

The breadth of start-ups represents a stable basis of innovation ideas. It is not only drug developers that are financed; on the contrary, these tend to be in the minority. The product areas are more in line with the strengths of the DACH business models in engineering, device developers and technology platforms. In these areas, a small amount of financing within a short development time can certainly bring a large return on investment. A drug developer has to raise significantly more money due to the high costs, usually takes longer and must be lucky enough to have chosen an interesting indication that allows to reach a comparable multiple for investors, while a device developer, for example, can achieve this lower capital need and faster time lines. The high risk of default and the total loss of the investment should only be mentioned in passing.

Assuming that investors do not risk their money lightly, the financing in the DACH region shows that even in difficult times there is a wide variety of interesting start-up projects that can find money - and that a veritable wave of start-ups in the life sciences is currently building up in Germany, rather unnoticed.

You can read the online version of this [LSG] Newsletter Special including a list of all deals included in the analysis at
https://www.life-sciences-germany.com/newsletter/lsg-newsletter-special-421011-dach-seed-financings-since-2020.html

Record changed: 2024-12-04