Startup Association: German Startup Monitor 2025

The latest German Startup Monitor (DSM) from the Startup Association shows an ecosystem in a state of tension. The scene is developing momentum in key technologies such as artificial intelligence and deep tech, and confidence in the location is growing. At the same time, there is still a lack of sufficient capital and cooperation with established companies is declining.

Germany is gaining appeal in international comparison

More and more founders see advantages in setting up their companies in Germany: 40% now rate Germany as more attractive than the USA, six percentage points more than in the previous year. Within Europe, 61% even believe that Germany is the top location.

The growing trust in Germany is an opportunity - also to reduce technological dependencies.

Verena Pausder, Chairwoman of the Startup Association

According to Verena Pausder, CEO of the Startup Association, this development provides important momentum. At the same time, concerns remain high: almost 80% see digital sovereignty as low and three quarters would like to see more support for European software solutions.

Sentiment between optimism and caution

The business climate remains above that of the economy as a whole, but has deteriorated noticeably compared to 2024. The willingness to start a business is also declining: while 90% would start a business again in 2023, the figure is now 78%. Nevertheless, the majority of founders would start up in Germany again. Those who can imagine a different location cite excessive bureaucracy and a lack of access to capital as the main reasons.

Capital remains the key bottleneck

When it comes to access to venture capital, Germany lags behind other countries. In terms of economic output, it is only in 18th place. Although around 5.4 billion euros flowed into local start-ups in 2025 and four new unicorns were created, the gap to the USA and other leading countries is growing. Another problem is the lack of IPOs. There has not been an IPO of a German unicorn since 2022. Pausder is therefore calling for the European Capital Markets Union to be driven forward in order to open up better prospects for growth companies.

AI and deep tech as drivers

45% of start-ups now place AI at the heart of their products, significantly more than in the previous year. Artificial intelligence has thus become the most important growth driver, even if investments in the US are many times higher.

At the same time, DeepTech is gaining in importance. 11% of start-ups can be assigned to this field. Record sums were invested in DefenseTech in particular (almost 900 million euros in 2025 alone).

Collaborations with established companies are declining

Although collaborations are a key business model for startups, their share has fallen again: only 56% still work closely with established companies. Before the pandemic, the figure was over 70%.

Startups see enormous efficiency potential for SMEs and industry, particularly in the field of AI. Pausder warns:"Collaborations will help determine whether Germany can keep up with global competition."

Overview of results

• Proportion of women: rises slightly to 20%.
• Employment: Teams are smaller, shortage of skilled workers is becoming less relevant.
• International specialists: 32% of employees come from abroad (Berlin even 42%)
• Digitalization: Administration and business are still lagging behind.
• Public contracts: Share of startup turnover is slowly increasing, now stands at 7%.

The German Startup Monitor 2025 is based on a survey of 1,846 founders and provides the most comprehensive overview of the situation and prospects of startups in Germany. It is published by the Startup Association and the ifo Center for Macroeconomics and Surveys.

>> You can find the entire Deuten Startupmonitor here on the homepage of the Startup Association.

We would like to thank the Startup Association for the very successful Startup Monitor and for the exciting insights.