Times of transition such as those we are currently experiencing with the Corona pandemic offer a wide range of opportunities for new business models, impulse and ideas for value creation. While the virus has inflicted substantial economic and social shocks, the world has been given a breather as air pollution and greenhouse gas emissions have significantly dropped. For the first time in years citizens in Delhi experienced a clear blue sky. Experts hope for the good and anticipate long term changes that ensure economic, social and ecological progress. Along with this, green technologies and sustainable digital business models will be increasing in demand in the future.
Germany has been known to be on the forefront of green technologies. More than one fourth of all startups in Germany are already in the so-called green economy. Some of them such as the German startup PEAT that has developed PLANTIX, an agricultural app for disease detection, pest control and yield increase, are also active in India.
In order to demonstrate the importance of green startups in the German startup scene, identify specific challenges and needs of green startups and recommend measures to improve the conditions and ecosystem of green startups in Germany, the German Startups Association in cooperation with the Borderstep Institute für Innovation und Nachhaltigkeit and funded by the German Federal Environmental Foundation recently published the Green Startup Monitor 2020.
The Green Startup Monitor 2020 examined and compared the responses of 338 green startups, founded by 816 entrepreneurs who currently employ 2,413 people, with the responses of 1,282 startups that do not belong to the green economy.
Some of the key findings of the Monitor are:
- 21% of all German startups can be classified as green since their products and services make concrete contributions to environmental and climate protection.
- Expectations for the business climate among green startups are better than among non-green ones and much better than in the established industry.
- Green startups are just as growth- and profit-oriented, but they additionally create social and ecological impact.
- At 22%, green startups have a significantly higher rate of female founders than non-green startups (13%).
- The advancement and participation of their employees is of much greater importance to green startups than non-green startups.
- The raising of capital is a much greater challenge for green startups, especially for very innovative green startups.
- Very innovative green startups have a strong interest in obtaining capital from business angels.
One of the main challenges for green startups remains access to finance. The difference is particularly striking in the subgroup of very innovative startups. This gives way for foreign capital, especially from India. India has seen a steep rise of green startups in the past years accompanied by the emergence of more than 100 impact funds. While the preferred funding model of German startups is government funding, business angel funding ranks second. It is along these lines that GINSEP promotes Germany as an important investment destiny for Indian business angels and venture funds. In a webinar recently conducted by GINSEP, around 25 Indian business angels and investors explored opportunities to invest in Germany’s startup scene. For end of October, GINSEP is planning a digital investment tour with sessions on the German startup ecosystem, live pitches and matchmaking events, among others.
If you are an Indian investor and interested to participate in the digital tour, get in touch with the GINSEP team via the website!