Startups in Germany - statistics & facts
Germany is ranked among the leading countries in the world for startups. There are a lot of factors that need to align in order for a new company to see success, there needs to be secure financial backing, and the relevant market also needs to be in a good position. Unlike more established companies, startups are expected to have rapid employee and sales growth. They are also often associated with being innovative in the products or services they offer, their business model and/or the technology they use which also involves a lot of outgoing costs.
The development of AI has opened up new possibilities for many startups as technology such as this means that certain tasks can be automated more easily which can also lead to a saving in certain costs. Over three-quarters of startups in Germany are at least regularly using AI so this market is likely to continue to grow in the coming year.
Opportunities and risks
The most popular industry for startups was information and communication technology, accounting for almost 30 percent of new businesses. People start their own companies because they have a vision of a product or service that they believe is missing from the market. There are also, however, other important factors that drive individuals to become entrepreneurs these include, independence or a higher income. Founding a startup does not automatically ensure success, it involves a lot of risk. In 2024, almost 300 startups were declared insolvent and over 800 faced some other type of liquidation.Financing startups
Financing is a big part of founding a startup as they are reliant on funding from external sources to launch the company and/or product before it starts producing a profit. In 2024, almost 50 percent of startups in Germany received state subsidies. The least common form of funding, unsurprisingly, was bank loans, likely due to the uncertainty of success when starting a company. Another popular way in which startups are financed, is often through external investors who will put money into startups in the hope of gaining high returns. 559 German companies were financed through venture capital in 2023.The development of AI has opened up new possibilities for many startups as technology such as this means that certain tasks can be automated more easily which can also lead to a saving in certain costs. Over three-quarters of startups in Germany are at least regularly using AI so this market is likely to continue to grow in the coming year.
