Fears of recession are easing: mood in German startups is improving

According to the business climate index for the start-up industry, the fear of a possible recession is no longer frightening for young companies. At 67 percent, the majority is optimistic about the future. The number of start-ups in the past year has fallen more sharply than ever before.

The mood among young, up-and-coming companies in Germany is brightening thanks to easing fears of a recession. The business climate index for the startup industry rose by 8.2 points to 50.4 points compared to the summer of 2022, according to a survey published by the startup association and the consulting firm Accenture.

67 percent of those surveyed were optimistic about their business prospects. In the previous survey, the rate was 54.2 percent. Almost half of the participants gave a positive assessment of the current situation. “Startups and the entire tech industry are suffering from the tense situation,” said Accenture manager Sebastian Günther. “But founders don’t give up, see light at the end of the tunnel and are now looking to the future with more optimism.”

Due to the weakening economy, the number of new startups in the second half of 2022 fell more than ever before. “Even the start-up ecosystem is not immune to the difficult economic situation,” said Magdalena Oehl, deputy chairwoman of the association, at the beginning of the year, according to a statement.

In Munich, 14.5 start-ups per 100,000 inhabitants were counted – the Bavarian state capital overtook Berlin (13.6) as the city with the most start-ups for the first time. According to the association, the slump in e-commerce was particularly clear with a minus of 39 percent. In contrast, there were 14 percent more start-ups in the environmental technologies category.

“While the decline is particularly strong in the federal states of Hamburg (-31 percent), Baden-Württemberg (-29 percent) and Berlin (-29 percent), which have a large number of start-ups, the number of start-ups in Hesse is even increasing slightly (2 percent)”, shared the association with. Overall, the five most populous cities dominated with a share of 39 percent of all start-ups.