Between inflation, the turnaround in interest rates and the economic downturn, the mood among German founders continues to cool – the business climate is only just above the previous low point in the Corona year 2020. In addition to the business situation, the general assessment of the startup ecosystem has also clouded over and, with 58% positive assessments, is ten percentage points below the previous year’s value. This leads to the conclusion: The innovation ecosystem in Germany is currently under pressure – but the German Startup Monitor 2023 also shows that the founders in this country are facing up to these challenges and breaking new ground. The vast majority of startups remain on course for growth, are pursuing ambitious goals and are facing up to the current challenges. In view of the transformation process in which the entire German economy finds itself, this is good news, because startups are making an essential contribution here.
Founders adapt growth strategy
Since the record financing year of 2021, raising capital for startups has become more difficult – in view of the new financing environment, only 15% of founders currently rate the investment readiness of VCs and business angels positively. In addition, many are adjusting their strategy: While 44% of startups still preferred venture capital financing in their planning last year, this figure has dropped significantly to just over one-third. At the same time, the issue of liquidity is coming back into focus and is currently a key challenge for around a third, compared with a quarter in the previous year. This primarily affects the fastest-growing startups, as larger financing rounds are becoming more difficult.
Startups assert themselves as an economic factor
Despite the many challenges, however, there is no question of a slump in the development of the startup ecosystem: The average number of employees in German startups remains stable at 19. Although 15% of startups had to lay off employees in the last year, the vast majority (56%) were able to continue hiring and create an average of eight new jobs in the same period. There is no frustration among the founders either – nine out of ten would found a startup again, and the vast majority of them in Germany (83%). This proves the general assessment that times of crisis are also times for startups.
More exciting facts from the German Startup Monitor 2023
- The proportion of startups with collaborative relationships with the established economy continues to decline: in 2020, the figure was 72%, today it is only 61%.
- 82% of startups use tools like ChatGPT – generative AI is particularly common in marketing (64%).
- 47% of startups see themselves as part of the green economy and want to contribute to climate and environmental protection, 42% more than in 2018.
- On average, founders have seven other founders in their circle of friends, and the networks are even stronger in the hotspots Berlin (12) and Munich (11).
- The number of German Unicorns has more than quadrupled since 2018 to 33 – but in an international comparison, we are still clearly behind locations such as the USA or Israel on a per capita basis.
- The hotspot Berlin has been hit harder by the current turbulence and financing bottlenecks: Here, 24% of startups had to make redundancies last year, compared to a national average of only 15%.
- RWTH Aachen, TU Munich and WHU are the top 3 start-up universities – 13% of the founders surveyed graduated from here.
Source: PwC Startup Monitor
Image: ipopba via stock.adobe.com