Corona crisis weighs on number of startups

According to a report by the KfW development bank, the number of young companies fell last year. Women remain significantly underrepresented.

There were 70,000 innovation- or growth-oriented young companies in Germany in 2019. Last year, there were only 47,000, according to the latest KfW Start-up Report. Every year, the state-owned promotional bank examines how the number of young companies in Germany is developing.

KfW explains this decline with the pandemic situation, among other things. This has certainly discouraged some founders with regard to their growth plans. As a result, one or two young companies have fallen out of the promotional bank's start-up definition. Nevertheless, the number of start-ups that want to rely on venture capital for their growth has remained fairly stable. In 2019, there were 9,400 companies, compared to 8,600 last year. "Although the coronavirus crisis left its mark on start-ups in 2020, we expect the start-up scene to develop as quickly as in previous years after this exceptional year," says KfW Chief Economist Fritzi Köhler-Geib.

The KfW report also shows that women remain underrepresented in the start-up ecosystem. The long-term average proportion of female founders is 20 percent. "The German start-up ecosystem and the VC sector would benefit from becoming more female," says Köhler-Geib.