According to the latest edition of the report series “Next Generation – Startup new foundations in Germany”, the number of newly founded startups in Germany continues to decline. Founding activity fell by five percent in 2023 compared to the previous year, reaching 2,489 newly founded startups. In 2022, there was an even steeper decline of 18 percent to 2,619 new foundations.
In the state-by-state comparison, Bavaria ranks first with 477 new foundations (2022: 544), followed by Berlin (468; 2022: 502) and North Rhine-Westphalia (413; 2022: 446). The trend in all three states is thus declining. However, Baden-Württemberg recorded more new startups than in the previous year with 304 new foundations (2022: 282), Lower Saxony with 141 (2022: 126), Saxony with 91 (2022: 71), and the city-state of Hamburg with 158 (2022: 143). This development underscores the growing importance of regions beyond the established startup hotspots. Here, the study authors particularly highlight the dynamism of research-intensive founding locations such as Darmstadt, Karlsruhe, and Heidelberg.
The decline in new foundations is visible in almost all sectors. The blockchain and crypto field has been hit hardest by far. Here, only 33 startups were founded – 64 percent fewer than in the previous year. The energy sector saw the most new foundations, growing by 69 percent to 88 young companies. Among the ten largest sectors, e-commerce (152 startups) and food (175 startups) have been particularly affected with declines of 18 and 16 percent respectively. The medical sector also recorded 269 new startups, representing a decline of 14 percent. Only the software sector managed to gain ground compared to 2022, recording an increase of 21 percent (462 startups).
New foundations per 100,000 inhabitants: Munich falls behind Berlin again
In line with the national trend, the number of newly founded startups in Munich is also declining. While 215 young companies were launched in 2022, only 187 were founded in 2023. This represents a decline of 13 percent. Accordingly, the metric of new foundations per 100,000 inhabitants also falls. Munich ranked first nationwide in the previous year with a value of 14.5, but this has now dropped to 12.4 – and the state capital must cede first place back to Berlin with 12.5 new foundations per 100,000 inhabitants.
Magdalena Oehl, deputy chairwoman of the Startup Association, says:
“It is impressive that despite global crises and increasing uncertainty, almost 2,500 startups were founded in Germany. However, the decline also shows us how difficult the financing environment currently is – especially in capital-intensive hotspots. Germany must develop a stronger entrepreneurial and founder spirit right now. If we make more capital available and support spin-offs from research, our economy will benefit even more from the innovative power of its startups.”
And Arnas Bräutigam, co-founder of Startupdetector, explains:
“Regional areas are gaining ground – Germany’s regions harbor great treasures. This is demonstrated by the high activity around research-intensive founding locations. However, the strength of regional areas is currently still being driven too heavily by individual hotspots like Munich in Bavaria or Dresden and Leipzig in Saxony. Rural regions, on the other hand, are struggling. So we need to effectively strengthen regional startup ecosystems and networks.”
