Corona crisis weighs on number of startups

The number of young companies fell last year, according to a report by the development bank KfW. 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. The state-owned promotional bank annually examines how the number of young companies in Germany is developing.

The KfW explains this decline, among other things, with the pandemic situation. This has certainly discouraged some founders with regard to their growth plans. As a result, one or the other young company falls outside the start-up definition of the promotional bank. Nevertheless: the number of start-ups that basically want to rely on venture capital for their growth remained reasonably stable. In 2019, there were 9400 companies, last year 8600. "The Corona crisis has left its mark on start-ups in 2020, but we assume that after this exceptional year, the start-up scene will develop as quickly as the years before," says KfW chief economist Fritzi Köhler-Geib.

KfW's report also shows that women remain underrepresented in the start-up ecosystem. The long-term average for female founders is 20 percent. "It would do the German start-up ecosystem and the VC industry good to become more female," says Köhler-Geib.