Carsten Berrar, Managing Partner of S&C’s Frankfurt office, and Senior Associate Florian Späth co-authored a chapter in the inaugural Chambers Global Venture Capital 2024 Guide. Carsten, the Guide’s Global Editor, also authored the introduction, which provides a global overview of the industry in 2023 and its outlook for 2024.
In their chapter, Carsten and Florian, together with Associate Johanna Nagel, discuss key trends and challenges in the venture capital market in Germany: In 2023, the German market saw promising areas of growth, but at the same time one-third fewer financing rounds, with the total funding amount declining by more than 50 percent compared to 2021’s more favorable conditions. As a result, start-ups and growth companies are looking towards alternative financing solutions.
Despite the “persistent challenges in the VC market and the struggles faced by many companies in securing funding,” Carsten, Florian and Johanna anticipate VC deal-making “to rebound to a certain extent in 2024 and beyond.” “On the one hand, investors are hopeful that macroeconomic conditions will improve, permitting a deployment of dry powder and an exploitation of backlogged opportunities due to a lack of activity in 2023. On the other hand, pressures to find exit opportunities exist, as LPs are yet to realise capital inflows often perceived as overdue,“ they write.
Read: Introduction
Read: “Law and Practice in Germany”