Germany is Europe’s largest economy, with 83 million citizens and a GDP of about $4 trillion. Innovation has created a vibrant startup ecosystem, one that is attracting significant investment. Startups in Germany have raised a record amount of €8.1 billion so far this year, surpassing the 2020 total by over 35 percent. So for a reason, Bloomberg named Germany the world’s most innovative country in 2020.
For a long time, it has been known that the German market is very attractive for domestic and foreign companies. What about startups? In this article, we will present you with the most important news of this world, so stay with us!
The flourishing German start-up scene
Let numbers speak for themselves. Start-ups business increased for the second consecutive (Q2 2021) compared to the same quarter the previous year, according to data from startupdetector and Statista. In the new Statista Dossier Plus (“Startups in Zahlen – Q2 2021”), Statista shows that after the start-up numbers had already been on the rise in Q1, Q2 2021 saw a surge of 213 start-ups over Q2 2020. Q2 2021 even beat the first-quarter number with 806 new start-up foundations. That’s a lot, doesn’t it?
The eCommerce industry is now Germany’s second most exciting sector for start-up founders in 2021.
We probably don’t surprise you that the eCommerce and software sectors dominated the German start-up scene. According to a breakdown of start-ups by industry, the eCommerce sector accounted for the second highest share of start-ups in Q2 2021. The only higher percentage belongs to the software sector.
German start-up market in 2021
Not all of the states are equally active in the eCommerce startup scene. In Germany, this fact is influenced by its regions’ location and level of development.
The German eCommerce start-up scene in 2021
The majority of eCommerce start-ups were founded in Berlin, the vibrant capital of Germany. The Berlin government registered 24 eCommerce start-ups in Q2 2021. Second place belongs to the federal state of North Rhine-Westphalia with 22 foundations. The great three is closed by Bavaria with a total of 15 foundations in the eCommerce start-up field. Next, we have Baden-Wurttemberg ( 11 start-ups) and Hamburg (8 start-ops). In the South and former Western Germany, these top five states for eCommerce start-up foundations are known as Germany’s economic engines. In Germany, only Saxony-Anhalt and Mecklenburg has build no startups in Q2 2021.
Not everyone has luck
In this comparison, most of the states in the lowest ranks are in the economically weaker East. Start-ups from a particular industry settle in regions where the industry is in better condition and better developed. Younger technologies like eCommerce or software are centered around the cosmopolitan capital. That’s the reason why Berlin is in prime. As you have already noticed, most manufacturers register their start-ups in North Rhine-Westphalia, and most mobility companies are founded in Bavaria and Baden-Wuerttemberg, Germany’s auto industry hub. So, industries benefit from good locations and prefer to run their startups in places where the environment is more appropriate for them.
Look at data that shows the most popular German industries for start-ups.
Industries for start-ups in German 2021
Most new businesses are founded in the software industry, as we mentioned. In the second quarter of 2021, 140 start-up companies were registered in Germany. And compared with the same period in 2020, 35 more start-ups were registered.
Among start-up founders, eCommerce is now the second most desirable industry. In contrast to Q2 2020, when the medical field had a second place, eCommerce surpassed the medical field in Q2 2021. The German authorities registered 95 new eCommerce start-ups during the second quarter of 2021. New eCommerce start-ups increased by almost 60% compared to Q2 2020. The wave of start-ups in the eCommerce sector can be attributed to the general trend toward more online shopping, which was sparked off by, for example, the Coronavirus pandemic.
Best of the bests
As always, one company comes first and another at the end of the ranking. This time, we will introduce you to the top 5 startups in Germany in 2021. See the list:
# 1 Get your guide
Get your guide provides travelers with a booking platform. This app was created to facilitate travel to unknown places. At first, tourists were connected to amateur tour guides. Later, it became an online platform that offered a full range of tourist services.
Personio provides human resources software to SMEs. Using their cloud-based software, all HR processes are digitalized and simplified. The company is based in Munich. It helps companies save time that they can invest in interesting topics like talent development or employer branding.
This company provides grocery delivery services on-demand. Is based in Berlin. Customers can get delivered groceries and other daily items from Gorillas within 10 minutes of placing an order. To store and supply groceries, it uses dark stores.
Flixbus makes mobility in Europe possible for everyone. They provide customers with low and competitive prices. The company has become the largest long-distance bus operator in Europe since 2013.
Lilium comes from Munich. This start-up wants to make one of the world’s first all-electric vertical takeoff and landing jets. They’re using ‘jump jet’ technology that the military has known for a while and has been using.
Is Germany a good place for start-ups?
Business founders around the world had a challenging year in 2020. Following the Coronavirus outbreak, many had to abandon their plans due to the uncertain economic outlook. However, in Germany, government measures, including financial aids, helped the startup industry recover. Not quickly in every case, but effectively.
There is so much potential in German startups. They are seeing a growing interest, and according to forecasts, it will stay that way for now. If you are wondering whether opening a startup in the German market is profitable, we hope, thanks to our article, you will finally decide on the first step. 😉