Germany's most popular venture capital location
Bavaria is the most important German state for the venture capital and private equity sector.
The Bundesverband Deutscher Kapitalbeteiligungsgesellschaften (German Association of Capital Investment Companies) puts Bavaria ahead of all other states, accounting for 23 per cent of all investments made in Germany in 2014. The results of the Finanzplatz München Initiative (fpmi) also list Bavaria's as the most important German state for the venture capital sector. These results were confirmation of an analysis by the University of Münster, which identified Munich as the most attractive German city for the sector last year, too.
The financial economy supports value creation
The strength and quality of the financial sector in Bavaria is also verified by the “Bavaria's Financial Economy in Figures” study conducted by the Bayerisches Finanz Zentrum (BFZ), which showed that 20 per cent of the value creation of the entire German financial sector is generated in Bavaria. With more banks than any other state, Bavaria is home to many small and medium-sized banks, as well as national and worldwide leading insurance providers such as the Allianz Group and the reinsurance company Munich Re. These allow companies to invest and safeguard their liquidity. A comparison of states shows that more investment tends to be made in medium-sized companies and start-ups in Bavaria. This also reflects the general economic structure in Bavaria, where small and medium-sized companies are particularly well-represented.
Venture capital for start-ups
The range of traditional credit on offer is supplemented by a constantly growing number of private equity and venture capital companies. 50 venture capital and private equity companies are represented in Munich alone. Investors can benefit from a large number of investment opportunities in newly-founded companies, particularly in the fields of IT, medical technology and biotechnology. Potential in the service sector also attracts a lot of venture capital and private equity funding. The state of Bavaria has recognised this and plans to improve conditions further, especially for start-ups. To this end, the Bavarian Ministry of Economic Affairs has set up a growth fund for Bavaria, offering EUR 100 million of funding to support promising new companies. The fund is intended to act as a neutral co-investment partner for growth financing for private venture capital companies in Bavaria. Combined with other initiatives such as the Business Plan Competitions, this makes Bavaria an extremely attractive location for both start-ups and potential investors.