Venture capital and private equity in Germany

Written on 27 Jan 2016

Osborne Clarke Germany has recently been listed as one of only two top tier law firms in the field of VC and PE by The Legal 500 Deutschland. German specialist journal Juve also rated the German unit repeatedly as “market leading” in 2015. These ratings underline the outstanding position which Osborne Clarke Germany has earned in the sector during the past decade.

Sector developments

The German VC market in 2015 was marked by significantly increasing funding volumes compared to the years before. Whereas the total investments into start-ups amounted to approximately $2 billion in the whole of 2013 and to $2.9 billion in the whole of 2014, the amount invested in only the first half of 2015 amounted to approximately $1.6 billion. We expect this trajectory to be reflected in the full year figures. Increased volumes were especially due to larger funding rounds and we also saw more strategic takeovers from corporates.

Legal developments which are likely to make an impact on the VC market in 2016 include the adoption of the so-called German Small Investors Protection Act (Kleinanlegerschutzgesetz) which will protect individuals when investing in the grey market by extending the prospectus requirements for suppliers -but at the same time this will complicate the crowd-funding processes in Germany.

Notable, too, is the expansion of the federal program “Zuschuss für Wagniskapital“, an initiative which refunds up to 20% of funds invested into start-ups by business angels.

Outlook for 2016

Overall we envisage a growing interest in FinTech, Food and AdTech start-ups, though e-commerce is likely to remain the driving force of the German start-up market.

Key deals in 2015

As in previous years, Osborne Clarke Germany experienced a high deal volume in 2015, especially in the digital business and life science sectors. Some of our key deals included advice to:

  • VC-backed client Turtle Entertainment GmbH and some of its shareholders in connection with the sale of a majority stake in Turtle to Swedish media group Modern Times Group (MTG). Turtle Entertainment GmbH is the holding company of ESL, the world’s largest e-sports company. ESL hosts numerous online and offline competitions for e-sport around the globe, such as professional computer game tournaments in sold-out football stadiums and computer game leagues which are recognised as sport by several national sports associations (e.g. in China and Brazil). The purchase price was a high two-digit million amount.
  • Highland Europe on investing €15 million into Berlin tech start-up adjust GmbH. adjust develops analysis tools for mobile apps which provide the operators of apps with information on user behaviour.
  • Sky & Sand GmbH on the sale of 100% of the shares in dailydeal GmbH (an operator of a couponing platform) to MenschDanke GmbH. This exit was the second exit of our clients in this company after their first exit to Google in 2011 (Google paid a low three-digit million purchase price). In 2013 our clients re-purchased the company again. We advised our client on all of these transactions.
  • Vimecon GmbH and its shareholders on a Series-C investment round. Vimecon has developed a new cardiac catheter technology which is about to enter the European and North American market.
  • ampido GmbH and its founders in several subsequent in-vestment rounds. ampido GmbH operates an online marketplace for private parking lots which can be booked in real-time via mobile app.
  • Clients like Blacklane, GSection and SHV Holdings in various transactions and financing rounds.