Generally VC investments are higher during good times or when there is a technological development and lower during bad times specifically after the crisis when the tech bubble bursts. This global pandemic is quite different from previous crisis in several aspects. In their study Bellavitis, Fisch and McNaughton pointed out three unique aspects of this crisis; first, it is a global health crisis, opposed to former financial crisis. Second, it is challenged governments all around the world to take sever measure both socially and economically. Finally, the rapid spread of the pandemic globally.
Germany before the pandemic, was not a special case in terms of VC performance in Europe, with investing only EUR 1.1 billion in 2017 on contrary to US overall EUR 63.8 billion venture capital investments. After the advent of the global pandemic, uncertainty in the markets increased especially in foreign markets, as consequence venture capital investments were reduced from abroad which resulted in shortage of capital in later stages of German VC landscape. Before pandemic, half of the deals above $50 million were completely led by foreign investors, 5% from sole German investors and remaining mix of both domestic and foreign investors. The current situation is a transition from hot market i.e. successful deals in 2020 and 2021, to a cooler market in 2022, where uncertainty in venture capital investments will be higher for short term.