Agency Report
Germany saw a record number of start-up launches last year, driven by a surge in interest in artificial intelligence (AI) and a broader economic slowdown, according to an analysis by the German Start-up Association.
A total of 3,568 start-ups were founded in 2025, a 29% increase on 2024 and higher than the boom year of 2021, when the Covid-19 pandemic fuelled demand for digital services such as delivery and financial apps.
“Over 3,500 start-ups, a third more than in 2024, show the courage and dynamism of German entrepreneurship,” said Kati Ernst, deputy chair of the Start-up Association. She noted, however, that Germany still struggles to scale start-ups due to funding constraints.
The growth trend was seen across almost all federal states. Berlin remained the leading hub with 619 new start-ups, up 24%, followed by Munich with 290. The capital is reportedly on track to recover from the sector crisis of recent years.
Around 27% of new ventures incorporated AI as a core part of their business model, with software the most common sector, accounting for 853 new firms.
Economic headwinds may have also contributed, as weaker job prospects often push people to launch their own businesses.
Funding conditions improved somewhat, according to the state development bank KfW, with around €2 billion ($2.3 billion) invested in the final quarter of 2025 alone. Promising start-ups in particular saw an easing of financing constraints compared with the past year.
