EY Startup Barometer 2023: Berlin remains the startup capital
Berlin, 19. Januar 2024 - The Startup Barometer from the auditing and consulting company Ernst & Young (EY) analyses investments in German startups every year. This includes all companies that have been in existence for less than ten years. For 2023, the auditors found a decrease in the total investment amount of 39 percent compared to the previous year 2022. The number of financing rounds also fell by 15 per cent compared to the previous year. According to the experts from EY, the decline in financing is particularly noticeable in Berlin. Startups in the capital region received less than half as much capital in 2023 as a year earlier – even so, the sum of almost 2.4 billion euros still corresponds to the highest value in a Germany-wide comparison. With a market share of 39 per cent, the Berlin startups continue to lead the ranking of the German startup landscape, but at the same time they lost eleven per cent of their previous market share.
A reason for concern? Not necessarily. The willingness to invest in AI startups, a large number of which are based in Berlin-Brandenburg, reached a new peak in 2023. The investment volume across Germany rose from 220 to an impressive 943 million euros. So it is no wonder that the promising software sector takes first place in terms of the total investment volume in German startups.
If we take a closer look at Berlin, the number of new startups totalling 468 last year is striking. According to the Startup association, the capital region remains the most popular German business location and therefore still relegates Munich to second place. Although a decline of seven per cent can also be observed here, the Startup association cites the general decrease in investments as a possible reason for this. Rising interest rates, the economy and global political crises caused uncertainty and led investors to distribute capital more cautiously.
The conclusion of the Startup association is therefore: “The startup engine in the central hotspots is stuttering.”[1] Dr. Thomas Prüver, Partner at EY, on the other hand, sees an opportunity for the German startup ecosystem to overcome the crisis in a new and stronger way, despite the general downturn.[2] In addition to Berlin, other regions would become more relevant and thus give Germany’s entire startup landscape more visibility internationally. In addition, the expert is certain that newly founded startups that have experienced crises due to current circumstances have already proven themselves to be resilient if they survive for a longer period of time and therefore have good prospects for further growth.
