German Startup Monitor 2020 Results

The 8th Edition of the German Startup Monitor presents some interesting findings with regards to how the Corona pandemic has affected the mentality of startups in Germany. The collected data gives a clear picture of the preferences and motivation of founders. It shows that despite the crisis, over 90% of startups have plans of recruiting more employees instead of reducing .

The startups seem to be adapting to the crisis by focusing on their strengths via product development. An increase in environmentally friendly products and services can be seen in the young companies when compared to the previous year’s results with 43% of startup companies for 2020 and only 37% for 2019. Sustainability is a major criterion for many customers, and this is affecting the ways startups build their brand and products.

According to the study, the four most common regions in Germany were:

  • Berlin (18%)
  • the Rhein-Ruhr region (13%)
  • Munich (7%)
  • Hamburg (6%)

These regions also provide a lot of opportunities for cooperation with other startups and corporates. While 61% of founders claim they are very satisfied with the startup ecosystem around them, almost a third of the participants thinks that cooperation with established corporations is difficult and should be supported by politics.

Additionally, the founders and teams of the startups are quite diverse and international. The international background coupled with the growth ambitions of the founders, results in plans for international expansion, despite the ongoing pandemic.

The founders were also asked about the biggest issues of their companies, namely these are:

  • Customer acquisition (68%)
  • Development of their products (45%)
  • Securing funding (43%)
  • Cashflow (32%)

While many startups made use of the available corona support funds, very few benefit from further governmental support. Even though many business angels and VC’s have provided financial backing for startups during the last year, around 42% of startups have applied for venture capital funds but only 19% succeeded in getting funding. Founders would expect more investment friendly politics to further support equity funding in Germany.

Overall, the defining characteristic of the startups in 2020 was their optimism and motivation to succeed even in the face of a global pandemic. The German startup scene is diverse with respect to products and backgrounds, but what unites them is the desire for success, collaboration and a sustainable future.