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German Startups on the Rise — Founder Interview

Updated: 1 day ago

This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.

What Is This About?

The 10th annual German Startup Monitor reveals how Germany's startup community has evolved over a decade. Key findings show North Rhine-Westphalia emerging as home to the most startups, while the survey tracks shifting founder demographics, funding patterns, and regional strengths across the ecosystem.

  • This blog post first appeared first on old medium publication (https://medium.

  • This year’s survey — the 10th — was especially interesting because it allowed researchers to see how the German startup community has changed over time.

  • North Rhine-Westphalia, Germany’s most populous state was home to the largest number of participants.

  • Here are some highlights, you can read the whole survey free of charge (in German only) by downloading it from the link at the end of this blog post.

  • Learn More here: https://deutscherstartupmonitor.



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German Startups on the Rise — Founder Interview Startuprad.io brings you independent coverage of the key developments shaping the startup and venture capital landscape across Germany, Austria, and Switzerland.

This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.


Results of the German Startup Monitor 2022 (Deutscher Startup Monitor DSM)

This year’s survey — the 10th — was especially interesting because it allowed researchers to see how the German startup community has changed over time. Note that the data was collected in cooperation with the German startup association and other partners, but the survey itself and the analytics were left to researchers. It seems that despite some major setbacks — which have caused many businesses their hiatus or close entirely-the country still remains an important part of European business culture. This time almost 2.000 startups, as well as 4.800+ founders and close to 35.000 startup employees participated. As always the survey was conducted in the spring of 2022, without knowledge of the current situation (Ukraine, Gas, Heating, Inflation, …). The survey is not representative. It can not be used for rankings and comparing cities.

North Rhine-Westphalia, Germany’s most populous state was home to the largest number of participants. Berlin came in second with Bavaria third as both contribute heavily towards new business creation throughout Europe’s technology hub. It is important that we understand these statistics and what they mean for your industry or potential investments.

Here are some highlights, you can read the whole survey free of charge (in German only) by downloading it from the link at the end of this blog post.


Startups as a whole are a large employer

  • With the startup scene in Germany, it’s no wonder that there are 1.6 million jobs secured directly and indirectly through this vibrant culture of entrepreneurs who want nothing more than to make their mark on society with innovative ideas- even if they have never done so before!


Business Climate

  • The business climate for startups in the country has been cloudy lately. As IFO Business Climate Index with -15,7% (https://en.wikipedia.org/wiki/Ifo_Business_Climate_Index) in September showed. 54% of respondents are looking positively at their future compared to 72% the year before.


Startup Employees

  • The startup community in Germany is vibrant, with on average 18 employees and more than 9 planned new hires each. Startups based out of Munich tend to be larger at 42+ workers while those located within Berlin can boast even higher numbers with 44+ employees. Startups in Munich planned to hire ~ 16 employees and in Berlin ~20.

  • Startups are also known for attracting top talent from around the world. According to recent data, the average startup has 28% of its employees coming from outside its home country. The majority of these international employees come from Europe (13%) and Asia (7%), with North America accounting for 2.3%. Teams in Munich and Berlin are especially international.


Women in Startups

  • In recent years, startups have been driving innovation and growth in the German economy. However, startup companies employ relatively fewer women than the German average. Only 37% of startup employees are women, compared to 47% for companies overall.

  • For the first time ever, startup companies (co)-founded by women have surpassed the 20% mark (20,3%). This is a significant milestone for women in business, and it highlights the growing importance of female entrepreneurs in the startup ecosystem. A number of factors have contributed to this increase, including greater access to venture capital and a growing awareness of the importance of diversity in startup teams. On the other hand, there is still a long way to go, seeing that 63% of startups are founded by all-male teams.


Skills of the Founding Team

  • For startup companies, having the right mix of technical and business skills is essential for success. The survey found that most startup teams are mostly combining business acumen with technical skills since 62.7% of startups have a technical co-founder and a business co-founder. Technical co-founders bring valuable skills and knowledge to the table, but they are often less able to sell their ideas to investors. Business co-founders, on the other hand, are often better equipped to drive growth and scale a startup. The best startup teams are those that have a balance of both types of skills.

  • Universities are often thought of as places where young people go to get an education and prepare for their future careers. However, they can also be fertile grounds for startup businesses. Many startup teams form at university, thanks to the presence of like-minded people and the opportunities for collaboration that universities provide. Universities are also hotbeds of innovation, with new ideas and technologies constantly emerging from research labs.


Industries

  • The startup culture has to lead to the development of an environment where innovation is highly valued. This is especially true in the information and telecommunications industry, which is the №1 industry for startups in Germany with 29,7% of all startups.

  • With the continued success of vaccines developed by medtech/biotech companies like BioNTech, it’s no surprise that medtech startups are booming. In fact, according to the survey, medtech is now the second-largest sector for startups in Germany with 10,6%.


Hot Topics

  • In a rapidly digitizing world, it’s more important than ever to keep up with the latest changes in technology. Startups are amazing in embracing new technologies. For them, the important topics are artificial intelligence to the Internet of Things. Industry 4.0 is another term that you may have heard thrown around recently, and of course, has importance for startups. The Metaverse is also an emerging concept that startups are paying attention to.


Funding / Venture Capital

  • Almost three-quarters of German startups are bootstrapped, meaning they are funded by the founder’s savings or personal loans rather than venture capital. However, only 30% of those surveyed said they would prefer to stay bootstrapped; the rest would like to eventually bring on investors.

  • In Germany, in fact, Government Funding, Business Angels, and “Friends & Family” are more important funding sources for entrepreneurs than venture capitalists. This should be a wake-up call for international investors.

  • 44.4% of entrepreneurs would prefer to receive VC funding, even though they know the odds of getting it are relatively low. While it may be difficult to obtain venture capital, it’s clear that it can be a valuable source of funding for the 18,6% of entrepreneurs who are able to get it.

  • 30% of participants have CVCs on board, they like the know-how, the gain in reputation, the opportunities for cooperation, and their distribution channels.


Cooperations

  • 63,3% of participants work with established companies, down from 71,8% in 2020

  • Also, cooperation with other startups is going down to 55,3%, from 60,2% in 2020


Challenges and framework

  • Startups are popping up everywhere. In order to be successful, they need a strong startup ecosystem. A startup ecosystem is a community of startup companies and the organizations that support them. This can include incubators, accelerators, co-working spaces, and venture capital firms. The survey found that 2/3rds of startups are happy with their local startup ecosystems. The majority of respondents said that their startup hubs provide access to the resources they need to be successful. This includes access to universities, a network of other founders, talent, customers, mentorship, and funding. A sense of community is essential for startup success. Startups that are part of a thriving ecosystem are more likely to survive and thrive than those that are not.

  • As so often in the 10-year history of the DSM the largest challenge is still access to capital

  • The survey found, almost 46% of startups said they saw themselves as part of the green economy. This is an increase from the 43,6% who said the same in the 2020 survey. The increasing number of startups that are embracing the green economy is a sign of hope for the future of our planet.


Political Affiliations and Elections

  • As the political landscape in Germany continues to shift, parties like the entrepreneur-friendly FDP are losing ground to the Green Party. This is frightening for the FDP since they have been traditionally in Germany the party of entrepreneurs. The survey found that almost 50% would vote for the Green Party if elections were held today. This is a significant increase from previous years, and it indicates that business owners are becoming more open to left-leaning policies. The SPD (5,9%) and CDU (10,1%) are also seeing lower support from entrepreneur voters, they are with the FDP in losing ground. This trend is likely to continue as Germany’s business community becomes more socially and environmentally conscious.


Challenges

  • The biggest challenge facing entrepreneurs is the talent shortage. With businesses shedding headcount at an unprecedented rate, there is still an increasing demand for qualified workers. The pool of talented individuals is not growing at the required pace. This has made it difficult for startups to find and hire the talented workers they need to continue their growth. As a result, many businesses are struggling to keep up with the competition. The talent shortage is a major challenge that entrepreneurs must overcome if they want to continue to grow their businesses.


Work/Life Balance

  • For entrepreneurs, the work week is never really over. In fact, the survey found that founders work an average of 55 hours per week, including 7 hours on weekends. That’s because when you’re running your own business, there’s always something that needs to be done. Whether it’s working on a new product, meeting with potential investors, or handling customer service issues, there’s always something that demands your attention.

  • You have to be okay with long hours because when you’re running your own business, there is always more work to be done. One of the great things about being an entrepreneur is that you can often work from home, or at least have the flexibility to do so. In fact, the survey found founders split their time 50/50 between working in an office and working from home.

  • Startups are a vital part of the economy, and their success is essential for driving innovation and growth. Unfortunately, 78,6% of startups never apply for public tenders, missing out on an important source of revenue. There are several reasons for this, including the perception that the process is too complex and the fear of competition. The government could play a role in addressing these concerns by simplifying the application process and providing more support to startup founders. In addition, the government should do more to promote the benefits of public tenders, such as exposure to new customers and the opportunity to collaborate with other businesses. By taking these steps, the government can make it easier for startups to compete for public contracts, which will ultimately benefit the economy as a whole.



What Is the German Startup Monitor 2022?

The German Startup Monitor (Deutscher Startup Monitor / DSM) 2022 is the 10th annual survey of Germany's startup ecosystem. This milestone edition allowed researchers to track a decade of trends. North Rhine-Westphalia had the largest number of survey participants. The full report is available as a free download in German from deutscherstartupmonitor.de.

Introduction

In this episode, Startuprad.io covers the results of the German Startup Monitor 2022 (Deutscher Startup Monitor / DSM), marking the survey's 10th anniversary. This milestone edition is particularly significant because it provides a decade of data for analyzing how Germany's startup ecosystem has evolved. North Rhine-Westphalia, Germany's most populous state, had the largest number of survey participants. The episode highlights key findings and provides links to download the complete survey report free of charge in German.

The 10th edition of the German Startup Monitor (Deutscher Startup Monitor / DSM) provides a comprehensive view of Germany's startup landscape in 2022. This anniversary edition is uniquely valuable for tracking how the ecosystem has changed over a full decade. North Rhine-Westphalia led in participation numbers, reflecting the state's growing importance in Germany's startup scene beyond the traditional Berlin hub. The report is freely available in German and offers data-driven insights into funding trends, regional distribution, and the health of Germany's entrepreneurial ecosystem.

  • The German Startup Monitor 2022 marks its 10th anniversary, providing a unique decade-long perspective on Germany's startup ecosystem evolution.

  • North Rhine-Westphalia (NRW) had the largest number of survey participants, highlighting the state's growing startup significance as Germany's most populous region.

  • The full survey report is available as a free download in German from deutscherstartupmonitor.de.

  • The 10-year data set allows researchers to identify long-term trends in German startup activity, funding, and regional development.

Entities Referenced in This Episode

Organizations & Reports

  • Deutscher Startup Monitor (DSM) / German Startup Monitor — 10th annual survey of Germany's startup ecosystem

Regions

  • North Rhine-Westphalia (NRW) — Largest number of DSM participants, Germany's most populous state

People

  • Jörn "Joe" Menninger — Startuprad.io host

Topics

  • German startup ecosystem survey, startup statistics, regional startup distribution, NRW startups, annual startup report

Relationship Map

  • Deutscher Startup Monitor → published → 10th annual survey (2022)

  • NRW → led → survey participation among German states

  • DSM → provides → decade of startup ecosystem data for Germany

Related Episodes on Startuprad.io

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What is the German Startup Monitor?

The German Startup Monitor (Deutscher Startup Monitor / DSM) is an annual survey and report that tracks the health and trends of Germany's startup ecosystem. The 2022 edition marked its 10th anniversary, providing a full decade of comparable data.

Where can I download the German Startup Monitor?

The German Startup Monitor report is available as a free download from deutscherstartupmonitor.de. Note that the report is published in German only.

Which German state has the most startups?

According to the German Startup Monitor 2022, North Rhine-Westphalia (NRW) had the largest number of survey participants. As Germany's most populous state, NRW has been growing its startup ecosystem significantly.

About the Host

Joern "Joe" Menninger is the host of the Startuprad.io podcast and covers founders, investors, and policy developments across the DACH startup ecosystem. Through more than 1,300 interviews and nearly a decade of reporting, he documents the evolution of the European startup landscape. Follow Joern on LinkedIn.

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Startuprad.io is building one of the strongest English-language knowledge and media platforms for the DACH startup ecosystem. We work with a small number of partners each quarter on visibility, thought leadership, and ecosystem positioning. Learn more here: Partner with Startuprad.io

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