In 2023, almost 2,500 start-ups were founded in Germany despite the weak economy and many uncertainties. Compared to the previous year, however, this is a decline of just under 5%. Contrary to this national trend, however, Hamburg recorded growth of 10 percent. With the report series “Next Generation – Startups in Germany”, startupdetector, together with the Startup Association, records the start-up dynamics in Germany.
In terms of absolute start-up figures, Berlin is at the top with 468 start-ups. This also applies again in relation to the number of inhabitants, after Munich had taken over the top position in the previous year. On balance, however, there were fewer start-ups in both cities than in previous years, meaning that the start-up engine in both hotspots is stuttering. Berlin has to cope with a drop of 7 percent, Munich even a drop of 13 percent. Hamburg, on the other hand, bucked the national trend and recorded growth of 10 percent.
Strong research ecosystems on the rise
What is striking is the momentum in research-intensive start-up locations such as Darmstadt, Karlsruhe and Heidelberg – there is great potential for Germany here. More and more innovative start-ups are emerging around German universities, quickly turning scientific breakthroughs into business practice. It is important to further strengthen this development, particularly in view of Germany’s role as a deep-tech location.
Regions beyond the hotspots are gaining in importance
Even though a third of all German start-ups take place in the major cities of Berlin, Munich and Hamburg, their share has been falling continuously since 2019. Regional states such as Baden-Württemberg, Lower Saxony and Saxony will see broad-based growth in 2023. This underlines the growing importance of regions beyond the established startup hotspots.
Frontrunner software, weak consumer sentiment hits food & eCommerce
The decline in start-ups can be seen in almost all sectors, with the weak consumer climate affecting the food and eCommerce sectors in particular. In contrast, the software sector is up 21% compared to 2022 – companies and customers are apparently hoping for digitalization boosts and efficiency gains here. The strong increase in the energy sector is also remarkable; despite a complex and highly regulated market, start-ups are bringing new momentum to the energy transition.
Magdalena Oehl (Deputy Chairwoman of the Startup Association):
“It is impressive that almost 2500 startups have been founded in Germany despite global crises and increasing uncertainty. However, the decline also shows us how difficult the financing environment currently is – especially in the capital-intensive hotspots. Germany needs to develop a stronger start-up and entrepreneurial spirit right now. If we make more capital available and promote company spin-offs from research, our economy will benefit even more from the innovative power of its start-ups.”
Arnas Bräutigam (Co-Founder startupdetector):
“There are great treasures lying dormant in Germany’s regions. This is demonstrated by the high level of activity around research-intensive start-up locations. However, the strength of the area is currently still too strongly driven by individual hotspots such as Munich in Bavaria or Dresden and Leipzig in Saxony. Rural regions, on the other hand, are struggling. So we need to effectively strengthen regional start-up ecosystems and networks.”
About the report:
The report “Next Generation – Startups in Germany” provides continuous, semi-annual monitoring of one of the key success indicators of the German startup ecosystem. The series is based on data collected by startupdetector on new startups in Germany, which is based on commercial register data and has been collected since 2019.