Startup Association and Startupdetector counted how many start-ups there were, where in Germany and what they were doing. Despite the recession, 2025 was a record year.
Everyone has had enough of annual reviews – but it’s worth taking a last look back at 2025: Together, the Startup Association and Startupdetector counted 2025 for their Next Generation Report and found that never before have so many startups been founded in Germany in one year as in the past 12 months.
Record year of founding
To be precise, there were 3,568 new start-up companies, 29 percent more than in the previous year 2024. The previous start-up boom year of 2021 (Corona, everyone wants everything with digitalization) was also exceeded (there were 3,196 new start-ups). With an average of 335 new businesses founded per month, the second half of 2025 was particularly strong.
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At the same time, the startup scene reported around 11 percent fewer insolvencies in 2025 than in the previous year. The B2C food and eCommerce industries in particular are slowly recovering, as the report shows. However, there were more bankruptcies than in the previous year in the areas of software and medicine.
The south is ahead of the north
Startup Association and Startupdetector also took a closer look at the regional figures and found: Bavaria. The number of new businesses has increased most significantly in Bavaria, by 46 percent compared to the previous year. The state capital Munich is – as was already reported last year – THE founding capital of Germany, with a clear lead over Berlin. 19.3 startups were founded per 100,000 inhabitants in Munich, whereas in Berlin only 16.8.
North Rhine-Westphalia and Saxony have also significantly increased the number of new start-ups compared to 2024, namely by 33 percent (NRW) and 56 percent (Saxony). In northern Germany, the start-up dynamic is significantly weaker than nationwide. In Bremen (-24 percent) and Schleswig-Holstein (-5 percent), fewer companies were founded in 2025 than before. Hamburg fell out of the top 10 list of founding cities in Germany, only landing in 11th place for the first time.
It is not surprising to look at the sectors in which the new start-ups will be distributed in 2025: Artificial intelligence is and remains THE central driver of the start-up dynamics of the last few years, report the authors of the report. By far the most new start-ups are in the software sector, followed by medicine and – a little surprise – food in third place. This segment has weakened greatly in recent years and grew by 80 percent in 2025 (measured by the number of new startups).
A trend that is likely to continue
With the increase in new businesses in 2025, a trend that had already begun in 2024 continued. And if entrepreneurs and observers of the ecosystem are to be believed, it is likely to continue in 2026: especially thanks to the opportunities that AI creates to build companies with fewer resources, i.e. tiny teams and less capital, the number of start-ups is likely to continue to increase.
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The Berlin entrepreneur and co-founder of the Factory, Udo Schloemer, recently announced that he wanted to build up to 800 new companies in the next two years and support them with his fund. Schloemer believes that AI development is now much faster and cheaper than ever before – often only small budgets are needed to bring prototypes to market maturity.
