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Local Germany
2 days ago
- Business
- Local Germany
Where in Germany are the most startups being launched?
Significantly more start-ups are emerging in Germany, thanks largely to the artificial intelligence (AI) boom. According to an analysis by the Startup Association, 1,500 new startups were founded in the first half of the year – that's nine percent more than in the second half of 2024. Most of the startups were founded in Bavaria, North Rhine-Westphalia and Berlin, but the eastern state of Saxony also saw tremendous growth. Many of the new companies were focused in the software sector - including AI-supported automation services - and online retail. The Startup Association suggested that the number of new startups sent a strong signal of recovery after the sector's recent challenges. Where in Germany are startups booming? In absolute numbers, Bavaria ( with 343 new startups), North Rhine-Westphalia (281), and Berlin (248) top the list for new company formations in the first half of 2025. As a city, Berlin remains Germany's most prominent startup hub with around 500 new companies founded annually. However, when measured per capita, Munich narrowly leads with 13.5 new startups launched per 100,000 inhabitants in the past year. Startup founders in the Bavarian capital can take advantage of support from some leading incubators and accelerators such as UnternehmerTUM . Other university cities such as Heidelberg, Darmstadt and Aachen also saw a large number of new startups founded relative to their size, highlighting the growing importance of research-driven locations. Technology and science-based startups tend to crop up in Germany's university cities, whereas Berlin and Munich attract a broader mix of ventures, including in the creative industries and digital platforms. READ ALSO: Which German cities are best for digital nomads to live in? The 'best' universities in Germany for 2025 Interestingly, the eastern German state of Saxony has seen by far the highest year-on-year increase in startup launches, with a staggering growth rate of 71 percent. In comparison Bavaria saw a growth rate of 23 percent, and North Rhine-Westphalia had 16 percent. According to the Startup Association report, Saxony's surge can be attributed to targeted regional initiatives and improved support structures. Advertisement How has the industry developed? After a record year in 2021, startup formations dropped to less than 2,500 in 2023, largely as a result of economic uncertainty and higher interest rates. Then in 2024 a turnaround began. Venture capital investment in German startups has risen significantly over the last 18 months, reaching a total of €4 billion in just the first half of this year, according to Germany's economic development bank (KfW). The AI boom, renewed investor confidence, and public support programs including the Digital Hub Initiative have all contributed to the rebound. READ ALSO: What startups should know about Germany's new 'digital hub' cities The current startup wave is dominated by the software sector, which accounted for 368 new companies in the first half of 2025. The boom in AI is a key driver, with industrial solutions such as AI-supported automation growing by 29 percent. The B2C segment is also rebounding, particularly in food (up 44 percent) and e-commerce (up 14 percent).
Yahoo
05-02-2025
- Business
- Yahoo
Startup associations call for Europe to unite behind AI development
Europe must not fall behind in the development of artificial intelligence (AI), startups France Digitale and the European Startup Network have urged. Verena Pausder, chairwoman of the Startup Association, said Europe must act swiftly in the face of intense competition from AI giants in the US and China. "The global race for AI leadership is accelerating. Europe can rise to this challenge – with unity and determination," she said in a statement. "Our strength lies in our talent, our world-class research, and the potential of our integrated market. But to lead, we must mobilize capital, scale our startups and ensure fair competition." The European Union and key national governments had to ensure a framework that fosters innovation rather than hinders it, she said. "A fragmented approach will weaken us; a united effort will make us a global force." Chief executive of France Digitale, Maya Noël said Europe has what it takes to be a leader in AI. By working together, Europe could "harness the capital, customers, and infrastructure needed for our AI companies to thrive and be sustainable in the long term — both economically and environmentally," she said. "Let's invest in our talents — researchers and entrepreneurs alike — to build the champions of today and tomorrow." The associations called for more capital from investors to boost growth, a pan-European programme to mobilize funds, and standard regulations in areas like corporate law, taxation and employment to facilitate AI firm expansion. The associations also recommend increased use of AI in the public sector and by small and medium-sized enterprises. Currently, only a few European players have gained recognition in the AI industry. The leading European AI startup Mistral AI from France focuses on developing open-source language models. Germany's Aleph Alpha develops AI systems to automate processes in companies and public authorities, while Cologne-based translation specialist DeepL competes with Google Translate and ChatGPT's translation functions. The Munich software company Helsing specializes in AI for the defence industry, with products like a swarm-capable combat drone intended to assist Ukraine against the Russian offensive. Despite these European successes, the gap with the US threatens to widen. In January, three top technology companies announced they would join forces and invest $500 billion to grow AI in the US. The new partnership, Stargate, will be formed by OpenAI, Oracle and SoftBank. Meanwhile, the Chinese startup DeepSeek recently challenged the dominance of US tech companies by presenting a powerful AI model created at a fraction of the cost.
