2025 marks a record year for startup formations in Germany. A total of 3,568 new startups were founded nationwide. This represents an increase of 29 percent compared to 2024 and even surpasses the previous record year of 2021. This development is documented in the report "Next Generation – Startup Formations in Germany," published by the Startup Association Published in collaboration with Startupdetector.
Bavaria plays a key role in this. With 785 new startups, the Free State accounted for 22 percent of all new businesses. This puts Bavaria significantly ahead of North Rhine-Westphalia and Berlin in a comparison of the German states. Almost all states recorded growth, with Bavaria, North Rhine-Westphalia, and Saxony showing particularly strong results.
Munich ranks first in startups per capita
Within Bavaria, Munich clearly stands out. With 19.3 new business start-ups per 100,000 inhabitants, the state capital leads the ranking nationwide and is further extending its lead over Berlin. The capital city achieves 16.8 start-ups per 100,000 inhabitants. In previous years, the figures for the top group were significantly closer than in 2025.
But the entrepreneurial spirit isn't limited to Munich. Other regions in Bavaria are also developing actively. Bavaria's Minister of Economic Affairs Hubert Aiwanger says:
"Our aim is that everyone with a good idea can start a business where they live. We fulfill this aim with our 19 Digital Startup Centers at 30 locations and a further 19 technology-oriented startup centers throughout Bavaria."
AI is driving up the number of startups
Technology-driven business models are shaping the landscape of startup activity. The software sector recorded the largest absolute increase with 853 new companies. Medicine and food are also experiencing significant growth. Artificial intelligence plays a central role: 27 percent of all newly founded startups use AI as a key component of their business model. This trend is particularly pronounced in software and medicine, for example in image recognition or the analysis of medical data.
Kati Ernst, deputy chairwoman of the startup association, puts the development into perspective:
"The record figures demonstrate the potential that lies within Germany. Our excellent research plays a key role as a starting point for innovation and new startups. Facilitating spin-offs from science and prioritizing innovation can provide our economy with additional momentum. However, when it comes to scaling companies, Germany has weaknesses. This is evident, among other things, in growth financing. Here, we need to significantly and rapidly improve the framework conditions."
The startup association makes the entire report available for download.
