Key Findings:

• Sharp decline in venture capital investment in the Advanced Manufacturing sector in Q1 2023: After a strong 2022 (all-time high investment volume at €1.1bn and an average of 60 deals per quarter), Q1 2023 drops significantly. Although the first quarter usually has been the strongest quarter in recent years, Q1 2023 recorded only 40 deals and an investment volume of only €152m. This sharp decline reflects the economic and political uncertainty and the current gloom in the VC environment.
• Germany leads the ranking by deal volume: With a funding volume of €628m (2018 to Q1 2023), Germany is ahead of the UK (€605m) and France (€585m). Due to high a high number of undisclosed deals (only 55% of German deals disclose the financing volume vs. 83% in the UK), the actual volume (and leadership position) is even higher.
• The maturity of the sector and its companies continues to increase: the average size of financing rounds increased from €1.3m in 2019 to €4.7m in 2022. In terms of investor types, accelerators and other early-stage financiers are losing importance while late-stage investors are becoming more relevant. The startups themselves are becoming larger and more mature.
• The exit is dominated by the trade sale way before IPO: The increasing maturity of the start-ups is not reflected in the number of IPOs withonly 3 IPOs in the last 5 years. However, as the business model of many advanced manufacturing startups is usually highly synergistic for classic industrial companies, the trade sale is the more typical exit path (50 trade sale exits between 2018 and 2023 Q1).