The German Startup Monitor 2022

In October 2022 the annual edition of the German Startup Monitor was published by the German Startups Association and PwC Germany. It was already the 10th edition of Germany’s most comprehensive report on its startup ecosystem.

The findings of the report are based on the survey in which almost 2.000 startups across Germany participated, representing more than 4.800 founders and almost 35.000 employees.

Since the definition of ‘startups’ differ between countries, it is of significance that the author of the study defines through the following three characteristics: 1) startups are less than ten years old, 2) startups are growth-oriented in terms of their employees/sales and/or 3) are (highly) innovative in terms of their products/services, business models and/or technologies.

Here are some extracts of the main findings of the report:

  • Business Climate: the startup business climate has declined – especially future expectations have become more uncertain. While the assessment of the current situation remains stable, significantly fewer startups (54%) have reported a positive outlook than last year (72%). However, it is striking that the business climate in the startup ecosystem is still significantly more positive than in the established economy.
  • Employment: Despite current challenges, employment numbers in the startup ecosystem remain strong. Also, more than a quarter of employees are internationals, with even higher shares in hotspots like Berlin and Munich.
  • Since 2023, the share of female founders has increased by 7.5%. For the first time, the share of female founders exceeded 20% in 2022. However, while the share of women in the general workforce in Germany is 47%, it is significantly lover among employees of startups (37%).
  • Founding teams: the majority of founding teams combine tech and business expertise .
  • Startups by industry: startups are active in all sectors of the German economy. The main sector remains to be ICT (almost 30%), followed by Medicine/Healthcare (10.6%) and Food / Consumer Goods (10.2%).
  • Crucial technological developments in the areas of Artificial Intelligence (AI), Internet of Things (IoT) and Industry 4.0 continue to gain importance among startups.
  • Funding: startups use a mix of funding and most respondents are satisfied with their investors. Founders play an important role as business angels – in addition to providing capital, they also share experience.
  • The exchange between startups and the established economy creates momentum – but more commitment is needed. Startups seem to be satisfied about their co-operation with the established economy. Corporate Venture Capital (CVC) seems to be another factor to bring together established companies and startups.
  • Local ecosystem: more than two thirds of startups rate their local ecosystem positively and ratings are improving. Berlin and Munich stand out as hotspots. The proximity to universities and networks to other founders are also rated positively. Access to capital (37%) and availability of affordable office space (41%) are seen as challenges.
  • Sustainability and growth are seen by the majority of startups as complementary strategies. 46% of startups see themselves as part of the Green Economy – a significant increase compared to the previous year. Bündnis 90/Die Grünen is by far the leading political party among founders (51%).
  • Lack of skilled labor: The lack skilled labor continues to gain massively in importance – for scaleups it becomes the key issue.
  • Changes in work culture due to the pandemic are clearly visible among startups
  • It is crucial to provide the right political impetus for the startup ecosystem: Both small and larger startups see simpler and faster administrative processes as a key lever to support the startup ecosystem. For smaller startups, public procurement and the expansion of public investments are key. In contrast, larger startups prioritize employee shareholding and improved visa conditions for skilled workers.
  • The potential of cooperation between startups and the state is not fully realized.

For an illustrated version and more details on the findings, access the English version of the German Startup Monitor 2022 here.