The German Startup Monitor 2025 reveals: Despite the strained economy, the German startup scene is developing dynamically. More and more founders see the country on the rise compared to other countries. Artificial intelligence and deep tech, in particular, are gaining importance. 45 percent of startups state that AI is at the heart of their product – a significant increase compared to 2024. Deep tech startups now account for 11 percent, and defense tech is experiencing record growth with almost €900 million in investments.
But the capital base remains weak. Relative to economic output, Germany ranks only 18th internationally in venture capital investments. While €5.4 billion flowed into German startups in 2025, the gap remains large compared to the US and even European neighbors like France. Four new unicorns were created, but no IPOs have materialized.
Verena Pausder, Chairwoman of the Startup Association, says:
"Even though some German scaleups are writing international success stories, we have two major pain points: too little capital and too few IPOs. The gap with the US is widening, not narrowing. We must finally mobilize more capital."
Germany is becoming more attractive, cooperation is stalling
A key finding of the monitor: Founders increasingly view Germany as an attractive location. Forty percent now rate it as more attractive than the US—six percentage points more than last year. In a European comparison, 61 percent see Germany as the best location.
According to Pausder, the figures reflect the upswing in the German startup scene. It is crucial to use this momentum from an economic and political perspective to reduce technological dependence, he says.
At the same time, the report reveals weaknesses in cooperation with the established economy. The proportion of startups with corporate partnerships fell from 62 to 56 percent – significantly lower than before the report.
Pausder emphasizes:
"Especially in a difficult economic phase, collaborations with startups are crucial for scaling new technologies like AI. They help determine whether Germany can keep pace with global competition."
The startup climate also appears ambivalent. While it is above the level of the established economy, it has declined. 78 percent of founders would found a startup again, down from 84 percent in 2024. Around 29 percent would go abroad if they were to start a new business – primarily due to less bureaucracy and better access to capital.
Proportion of female founders and international specialists increases
Further results from the German Startup Monitor show that the proportion of female founders has risen slightly again to 20 percent. International specialists continue to play a key role: 32 percent of employees in German startups come from abroad; in Berlin, the proportion is as high as 42 percent. At the same time, digitalization remains a major challenge. 81 percent of founders rate the level of digitalization in public administration as low. The public sector is also increasingly acting as a client. While the volume remains comparatively small, the share of revenue has steadily increased from 4 percent in 2019 to 7 percent this year.
The German Startup Monitor 2025 is based on information from 1,846 startups and was created in cooperation with the ifo Center for Macroeconomics and Surveys.
Click here for the report.
