Startup boom in Germany despite poor economic environment

According to a study, the start-up boom in Germany is unbroken despite the poor economy. Since the beginning of the year, more than 3,000 startups have been added, more than ever before. This is shown by the “German Startup Monitor”, a data analysis and survey of around 1,800 growth companies.

In addition, ten new start-ups with a company valuation of at least one billion euros had emerged by the end of September, according to the report, which has been published since 2013 and is available to the dpa news agency. These are more new billion-dollar start-ups (“unicorns”) than there have been since 2021. With a total of 39 “unicorns” there is a record number.

AI and armor as drivers

These include giants such as the online broker Trade Republic, the smartphone bank N26 and the software company Personio. New additions this year include the software company Osapiens, Neura Robotics and the defense company Stark Defense. "Germany is starting up again - on a broad scale and on a strong technological basis," said Verena Pausder, CEO of the start-up association.

The start-up industry is benefiting from increasing investments in defense companies, including Quantum Systems and the drone manufacturer Helsing, which are raising a lot of money from investors. Another growth driver is artificial intelligence (AI). For 53 percent of the start-ups surveyed, technology is at the center of the product - in 2024 it was only 39 percent. At the same time, AI makes starting a business much easier.

Raising capital remains difficult

Between January and September, German start-ups raised eight billion euros in venture capital, it is said. This is more than in 2025 as a whole. If the current trend continues, the investment volume in 2026 is expected to reach twelve billion euros, the second highest value behind the boom year of 2021.

Nevertheless, raising capital remains an obstacle, according to the association: Young start-ups are increasingly having problems getting cash injections. Established companies such as Helsing and Quantum Systems as well as the robot provider Neura Robotics have succeeded in this; However, this would mean that these three would not be among the top ten largest financing rounds in the USA.

The majority of start-ups (62 percent) also prefer to go to the USA for a potential IPO, while only 27 percent prefer Germany. And when it comes to digital technologies, 64 percent rely predominantly or entirely on US providers - also due to the lack of European alternatives.

Germany is not very attractive as a location

Of the approximately 1,800 companies surveyed, only about a third rated Germany as an attractive place to start a business. That is around six percentage points less than last year.

However, the association still sees strengths in the connection with universities. Every second start-up (51 percent) is supported by research institutions. In 59 percent the product is based on new scientific findings.

Universities are the most important pillar in the ecosystem, says Alexander Hirschfeld, research expert at the start-up association. "Considering the quality of the German research landscape, there are still far too few people starting their own businesses."