German Start-Up Founding and Financing Levels Have Recovered

April 2022

The corona downswing is over – that’s the main takeaway from the annual Startup Detector Report based on data from Germany’s commercial registries.

3348 startups were founded in 2021, up 338 or roughly eleven percent from the previous year. (The total number of newly founded companies was 105,337.) Startups were defined as “innovative, most digital companies…which present a significant potential for growth and upscaling and mostly target digital markets.”

The numbers show a full bounce-back from the onset of coronavirus disruptions in Q2 2020.

“Less than a year later, the founding of start-ups was already being encouraged – likely by continuing digitalization in version areas of life and work,” wrote Startup Detector.

Berlin continues to dominate the German start-up landscape. 2021 saw an average of more than two new start-ups per day established in the German capital, but other parts of the country also recorded significant increases in foundings. They include Saxony-Anhalt (166 percent) and Saxony (54 percent) in the east and Lower Saxony (30 percent) and Baden-Württemberg (21 percent) in the west.

Moreover, 2087 existing start-ups received financing – a rise of 446 or around 27 percent. The number of financing rounds was 2183, 408 more than in 2020.

“Because of corona, start-ups found it tougher to get investors involved in Q2 and Q3 2020,” analyzed Startup Detector. “But by the end of the year, there was robust investment again. Over all of 2021, investment activities topped even the highest levels of the previous year, and they were headed only in one clear direction – upward.”

Investors were most likely to put their money into the sectors of medicine, software and e-commerce, but there was growth across the board.

Berlin continues to dominate the German start-up landscape. © BMWK/Susanne Eriksson