Start-up industry - Start-ups on the rise again - boom in AI helps
After strong declines, more startups are being founded in Germany. According to an analysis by the Startup Association, which was obtained by the German Press Agency, 1,384 new companies were founded in the first half of 2024. This represents a 15% increase compared to the second half of 2023 and a 7% increase compared to the previous year's period.
"The significant increase in new startups shows that the entrepreneurial spirit in Germany is strong," says Helmut Schönenberger, deputy chairman of the Startup Association. After the decline in the middle of 2022, a positive trend is now emerging.
Boom in Software Start-ups
The software sector is driving the industry, according to the study, which was conducted by the analysis firm Startupdetector using commercial register data. With 302 new start-ups, there was an increase of 35%, making software the industry for every fifth new start-up. This reflects the increasing digitalization and the use of Artificial Intelligence (AI) in the business world, according to the Startup Association. The hype around the chatbot ChatGPT has particularly highlighted AI. Overall, the survey found that start-up formations increased in almost all sectors, with particularly strong growth in online retail (plus 36%), while there was stagnation in the food and medicine sectors.
Start-ups benefited from a digitalization push and low interest rates during the Corona pandemic. Logistics services and financial brokers, for example, experienced a boom. However, with rising interest rates, economic concerns, and the Ukraine war, investors became more cautious. Many start-ups struggled to get funding and had to cut jobs.
New start-ups are also growing outside the founder hotspots
According to the study, Berlin, Bavaria, and North Rhine-Westphalia were at the forefront of new company formations. In particular, there was a significant increase in North Rhine-Westphalia (plus 25%) and Berlin (plus 28%). Berlin and Munich remain the startup hubs in this country, accounting for more than a quarter of all new start-up formations in the country (26%).
Not only the large founder metropolises, but also many smaller cities and regions are contributing to new company formations, it is stated. Aachen, Darmstadt, and Heidelberg are among the strongest startup cities per capita. The increasing importance of regions shows "the potential that is dormant in Germany's depths," says Felix Engelmann, co-founder of Startupdetector.
- The German Press Agency reported that the software sector contributed significantly to the increase in startups in Germany, with a 35% increase in new software startups compared to the previous year.
- Despite the challenges posed by inflation, which has been a concern in Germany, many new startups in the software sector have managed to secure funding and continue operations.
- The company based in Berlin, which specializes in developing software, has seen a surge in demand due to the increasing digitalization and the use of AI in various industries, according to the German Press Agency's analysis.
