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New start-ups in Germany: Bavaria is ahead of Berlin, medicine is the second strongest start-up sector, regions beyond the hotspots are catching up

Together with the startup association, startupdetector published the report “Next Generation – Startup startups in Germany” and presented the 2023 trends for the startup landscape in Germany: New startups will decline in 2023 (-5%), which is at the same level of the pre-Corona year 2019. This trend affects almost all industries, but medicine remains the second strongest start-up industry. Berlin overtakes Munich in terms of per capita start-ups, but remains behind Bavaria in terms of absolute numbers and: the regions beyond the hotspots are becoming more and more interesting for new start-ups.

In 2023, almost 2.500 startups were founded in Germany despite a weak economy and many uncertainties. However, this is a decrease of almost 5 percent compared to the previous year. With the report series “Next Generation – New Startups in Germany”, the Startup Association and startupdetector record the start-up dynamics in Germany.

About the report: “Next generation startups in Germany

January – December 2023” (Link: https://startupverband.de/fileadmin/startupverband/mediaarchiv/research/Next_Generation_Report/Next_Generation_Startup-Neugruendungen_in_Deutschland_2023.pdf)

A look at the dynamics of new startups in Germany in 2023 shows:

New start-ups will decline in 2023 and will be at pre-Corona levels

In 2023, 2.489 startups were founded in Germany, almost 5% fewer than in 2022. This important indicator has therefore fallen to the level of the pre-Corona year 2019. Compared to 2021, the decline is even 22%. The decline in the second half of 2023 stopped the hoped-for positive trend in the first half of the year. Since August, the start-up momentum has again been significantly below the level of previous years. This breaks the positive development between 2019 and 2021: 16 of the last 24 months were below the average of monthly new startups from 2019 to 2021.

Berlin is once again ahead of Munich in terms of per capita start-ups

In absolute numbers, Bavaria (477), Berlin (468) and North Rhine-Westphalia (413) are at the forefront when it comes to new startups - but are losing momentum. Berlin is again overtaking Munich in terms of start-ups per capita, but at the same time activity in both hotspots (-7% and -13%) is falling more sharply than the national average. Among the federal states, Saxony, Baden Württemberg and Lower Saxony and Growth are among the winners in 2023. These were able to develop positively contrary to the negative trend.

Smaller locations and regions beyond the hotspots are catching up

Significantly more startups are being founded per capita in Berlin and Hamburg than in the other federal states - but their share has fallen from 33% in 2019 to 25% in 2023. The strength of federal states is often driven by individual, particularly relevant hotspots: examples include Munich in Bavaria or Dresden and Leipzig in Saxony.

However, the regions beyond the hotspots are becoming more important: Since 2019, the proportion of new start-ups from Berlin, Munich and Hamburg has fallen from 41% to 33% - smaller locations have been able to catch up. The area, on the other hand, is becoming increasingly important. Area states such as Baden-Württemberg, Lower Saxony and Saxony recorded broad growth in 2023. This underlines the increasing importance of regions beyond the established startup hotspots. Rural regions find it difficult to build startup ecosystems, but attract with lower costs of living. It is important to strengthen the breadth and sufficiently network existing startups.

Medicine is the second strongest industry for new start-ups

The decline in new start-ups affects almost all sectors; the losers are mainly eCommerce (-18%) and food (-16%) due to the weak consumer climate. However, the software area can grow significantly (+21%). At second place, the medical sector remains at the top of the industries with the most startups. Behind the top 2, the number of new startups in the energy sector is increasing significantly (+ 10% to 69 startups). The big loser is the field of blockchain and crypto: only 88 startups were founded here in 2023 (-33%).

The startupdetector records new startups in Germany using commercial register data and derives trends in the early phase through continuous monitoring.

Article from “Bio M” from January 18.01.2024, XNUMX


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