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Germany Sets 2025 Start-Up Record as AI Drives New Wave of Founders

Analysts expect the momentum to continue into 2026.

Overview

  • A total of 3,568 growth companies were founded in 2025, up 29% year over year and above the previous 2021 peak.
  • Artificial intelligence featured in 27% of new business models, with software the largest sector at 853 new firms.
  • Bavaria led in absolute numbers with 785 start-ups, followed by North Rhine-Westphalia (658) and Berlin (619), while Munich ranked first per capita with 19.3 per 100,000 residents.
  • Saxony posted the fastest growth rate at 56%, with strong gains in Bavaria (46%) and North Rhine-Westphalia (33%), reflecting momentum beyond traditional hubs and strength in research-linked cities.
  • Funding conditions eased late in the year as roughly €2 billion flowed in Q4 2025, reported start-up insolvencies fell about 11%, and observers still warn of scaling challenges.