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Platform Economics

Chemical startups lack venture capital

The chemical industry is one of Germany’s key industries. But does it look set to stay that way? A new study has shown that the number of startups is declining and investment of venture capital is low.

17 Sep. 2019
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Chemical startups lack venture capital (image: Leibniz Center for European Economic Research (ZEW))

Dr. Christian Rammer of the Leibniz Center for European Economic Research (ZEW), and co-author of a study commissioned by the German Chemical Industry Association (VCI) , says that the expertise of many chemical startups lies in their special products for industrial production. According to the study, however, German chemical startups are currently at risk: In 2018, over €54.5 million in venture capital was invested in chemical startups in Europe, but only €2.4 million of this in Germany – the lowest figure since 2007. It is therefore not surprising that the number of startups in the German chemical and pharmaceutical industry also fell, while it rose in most other European countries.

Back in 2017, the German Startups Association set up a chemical platform to support the development of new technologies and boost the efficiency of production processes in the industry; the platform’s partners include BASF, Covestro, and Lanxess.

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