German Biotech Industry: Funding Down Slightly – Still No IPOs in Sight in Germany
Series B funding for German biotech companies hits a historic low
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Despite challenging market conditions, Germany’s biotech companies raised a total of 1.8 billion euros in capital in 2025—a 5 percent decrease from the previous year, when the total stood at 1.9 billion euros. Venture capital investments also declined in 2025 compared to the previous year, falling from just under 900 million euros in 2024 to 601 million euros (a 33 percent decrease). This amount was additionally concentrated among a few large companies in later stages of development. The top three deals accounted for a total of 71 percent of the venture capital. Smaller biotech companies had significantly more difficulty raising capital.
These are the findings of the “German Biotechnology Report 2026” by the audit and consulting firm EY, prepared in cooperation with the industry association BIO Deutschland.
Klaus Ort, Senior Partner in the Life Sciences & Health practice at EY-Parthenon, says: “Despite economic headwinds, Germany’s biotech industry has weathered the storm. However, structural changes in the financing landscape remain evident: while capital is available, it is increasingly concentrated on a few, already more advanced companies. Many biotech companies, particularly during the growth phase, are stalling. The sustainable development of the industry therefore depends largely on whether we can close financing gaps and accelerate the transition from research to industrial value creation.”
Dr. Viola Bronsema, Managing Director of BIO Deutschland e.V., emphasizes: “Germany has a problem with the value creation of biotechnological inventions and developments: scientific excellence is undisputed, but so far it has not led to economic strength to the same extent. Limited access to growth capital and protracted processes within fragmented structures are holding back development. It is now crucial to improve these framework conditions swiftly and in a targeted manner. This makes an innovation-friendly collaboration between politics, the capital market, and industry all the more important, one that facilitates investment and enables scaling.”
Industry Revenue Declining
Overall, total revenue for the biotech industry in 2025 stood at twelve billion euros—a one percent decline compared to the previous year. Spending on research and development fell by four percent to 4.5 billion euros. The number of employees rose by three percent to 59,607 employees across 1,052 companies (up three percent). Furthermore, in 2025, the German biotech market once again failed to open the IPO window and thus to bring about an initial public offering by a German biotech company on the domestic stock exchange. This stands in stark contrast to the U.S.: Even in a generally weaker market environment, twelve biotech IPOs took place there in 2025, raising approximately 2.1 billion euros.
Furthermore, nearly all of the last ten IPOs by German biotech companies have taken place on the U.S. technology exchange NASDAQ. The last IPO in Germany—apart from Pentixapharm, which listed in 2024—took place years ago (BRAIN Biotech in 2016; before that, Wilex in 2006). Ort: “The lack of domestic IPOs represents a significant structural weakness: stock market listings provide companies with broader access to capital while simultaneously creating liquid valuations for follow-on financing. German biotech startups largely lack this avenue for raising capital in the domestic market.” After a strong year in 2024, the German biotech M&A sector lost momentum again last year: While large individual transactions continued to dominate market activity, the total number of mergers and acquisitions also rose—from ten in 2024 to 13 last year. However, the M&A value fell by 1.8 billion euros to 2.9 billion, a decline of 38 percent.
After a recovery in 2024: Early-stage financing collapses
In 2025, the situation regarding early-stage financing deteriorated significantly compared to the previous year: After more than doubling from 2023 (€207 million) compared to 2024 (€419 million), the figure stands at €160 million in the current analysis period. Particularly dramatic is the slump in so-called Series B financing, where the total dropped from 169 million euros to seven million euros—a historic low over the past eight years. Bronsema: “This sharp decline in follow-on financing suggests that larger follow-on venture capital rounds between 2022 and 2025 hardly took place at all due to growing investor uncertainty.” In contrast, Series A financing remained relatively stable at 75 million euros in 2025. Seed financing also declined to 78 million euros following the record level in 2024, but remained well above the historical average.
This trend points to a persistent “bottleneck problem” in the industry, according to Bronsema: “While many new biotech startups are being founded in Germany and the first round of financing is functioning solidly, there is a significant bottleneck in the transition to the growth phase. Without sufficient capital for the second funding round, many young companies struggle to develop or scale their technologies to clinical maturity.” As a result, they are often forced to sell to international investors at an early stage or relocate their operations abroad, Bronsema adds. Experts therefore warned that a lack of growth capital could lead to Germany losing talent and intellectual property—with the result that its own innovations would later have to be bought back from abroad.
Full pipelines offer hope
Applications in therapeutics and diagnostics (“red biotechnology”) continue to dominate the German biotech industry. Progress is particularly evident in the renewed increase in the number of clinical trials: Phase 2 projects in particular have increased significantly since 2012, rising from 100 to 118 last year. The number of compounds in Phase 1, however, declined slightly, partly due to project discontinuations or progress into later phases. At the same time, several companies were able to successfully continue their development efforts. Phase 3 trials remained stable, with individual active compounds advancing to this decisive phase. Overall, the pipeline appears more mature, with an increasing focus on advanced clinical development.
This is another reason why EY-Parthenon Partner Ort takes a primarily positive view of the industry’s future: “The outlook for German biotechnology is challenging—but fundamentally positive. Scientific excellence, technological expertise, and a growing innovation dynamic form a strong foundation. However, it will be crucial to translate these strengths more consistently into industrial scaling and economic value creation. Global competitive conditions are intensifying, while capital, regulation, and speed are becoming key success factors. At the same time, developments in areas such as artificial intelligence and data-driven research are opening up new opportunities.
Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.
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