The economic mood in Germany is becoming increasingly gloomy. Startups are defying the trend and are looking positively to the future — according to the current German Startup Monitor, probably the most prominent startup study in Germany.
Currently, almost half of the companies surveyed in the Startup Monitor rate their business situation as good, and another 43 percent as satisfactory. Only 8 percent rate the situation as poor. Young companies are even more optimistic about the future: Two-thirds of respondents expect business to improve even further, just under a third expect conditions to remain the same, and only 2 percent anticipate a less favorable future. In total, the study includes 1,933 German startups with 4,707 founders and 24,050 employees.
The five most important findings from the German Startup Monitor 2019
Most of the startups surveyed come from Berlin (16.1 percent), the Rhine-Ruhr region (14.3 percent), Hamburg (7.4 percent), Stuttgart/Karlsruhe (7.3 percent), and Munich (6.9 percent). Around two-thirds of the startups in the monitor have digital business models, while only 13 percent explicitly pursue analog business models.
“With their innovative ideas, startups not only ensure growth, they also drive digitalization in Germany and thus shape technological and social progress,”
says Prof. Dr. Tobias Kollmann from the University of Duisburg-Essen, author of the study.
These are the five most important findings of the Startup Monitor:
- More jobs: The startups surveyed this year employ an average of 13.3 people. Last year, the number of employees was 12.3, and in 2017, it was 10.9. German startups plan to continue expanding their workforce in the future and hire an average of 7.9 new employees. Munich startups even anticipate 14.7 new hires.
- More female foundersThe proportion of women among founders is rising slowly but steadily. From 13.0 percent in 2015, the proportion of female founders has grown slightly each year, reaching 15.7 percent in 2019. However, there is still a long way to go before gender equality is achieved. If the current rate of growth continues, it will not be until 2071 that as many women as men will start businesses in Germany.
- Munich universities are top: The Technische Universität München produces the most startup founders. 3.2 percent of the surveyed founders previously studied at TUM. Ludwig Maximilian University, another Munich university, follows in second place. The Karlsruhe Institute of Technology takes third place.
- Venture capital is concentrated in the startup hotspotsStartups need money to grow. A traditional route is through venture capital. 15 percent of the startups surveyed are VC-funded, but there are significant differences between Germany's startup centers and the periphery: Berlin has the highest proportion of VC-funded startups at 29 percent. Munich follows in second place with 20 percent, followed by Hamburg with 19 percent. In the Rhine-Ruhr metropolitan region, 10 percent of startups received venture capital, and in Stuttgart/Karlsruhe, 6 percent.
- Startups value their ecosystem: At 58 percent, the clear majority of all German startups surveyed rate their respective ecosystem as "good" or "very good." Berlin takes the top spot in the local rankings, with 75 percent of founders satisfied, ahead of Munich with 63 percent and the Rhine-Ruhr region with 59 percent.
Not all founders were model students
TV investors Frank Thelen and Ralf Dümmel like to flirt with their difficult school careers. The founders in the German Startup Monitor also didn't always have an easy time with school. Only a narrow majority reported strong academic performance. More than one in five respondents received class records or expulsions during their time at school. 12 percent of respondents had to repeat a grade at least once.
