German entrepreneurs are at their youngest age on record in the KfW Start-up Monitor 2025.
Germany's Start-up Landscape Shows Promising Trends and Persistent Challenges
Germany's start-up ecosystem is experiencing a significant shift, with a growing emphasis on digitalization and AI-driven solutions, according to the KfW Start-up Monitor 2024.
The median age of new business founders in Germany decreased to 34.4 years in 2024, marking a notable drop from the early 2000s when the median age was between 37 and 38 years old. This trend suggests a younger generation is increasingly taking the entrepreneurial route.
Women accounted for 36% of startup activity in 2024, with a long-term average of 39%. However, women are more likely to pursue temporary self-employment, with 28% doing so compared to 17% of male counterparts. Despite this, women remain underrepresented in German start-ups, making up about 20% of the founders.
The planning rate for starting a business recovered to 4.9% in 2024 after a low in 2023. A total of 585,000 new businesses were registered in 2024, which is 17,000 more than in the previous year, representing a 3 percent increase.
Interestingly, 36% of 18- to 29-year-olds said they would prefer to be self-employed rather than employed, with this age group having the highest share ever recorded, at 39 percent. On the other hand, 40- to 49-year-olds accounted for only 16 percent of start-up founders, and 50- to 65-year-olds accounted for only 12 percent.
In terms of capital requirements, German start-ups raised around EUR 2.4 billion in venture capital in Q2 2025, a significant increase (+45% quarter-on-quarter). This reflects a robust funding environment compared to the broader European market.
Startups are increasingly running on AI tools that automate complex tasks such as inventory management, compliance, and customer interaction. The focus is shifting to AI-driven, regulation-ready, locally tailored solutions in sectors like finance, mobility, and healthcare where Germany has an edge due to deep expertise and complex industries.
However, the propensity to start a business in Germany remains low, according to Dirk Schumacher, Chief Economist at KfW. Schumacher warns about the succession gap in companies and suggests that more people should decide to take over existing companies. He also emphasized the importance of financial education and its positive impact on the likelihood of starting a business.
Schumacher also pointed out that only 56% of startups needed up to €5,000 in start-up capital, compared to more than two-thirds previously. Meanwhile, 75% of start-up founders in 2024 relied exclusively on their own funds, a historic high.
Despite the promising trends, persistent challenges remain. Women still face bias and receive disproportionately low funding, with only 20% of founders being female. This gender gap is attributed to enduring social stereotypes and structural barriers.
The KfW Start-up Monitor was conducted with 50,000 representative telephone interviews and 10,000 online interviews in 2024. The complete KfW Start-up Monitor is available for access.
In conclusion, Germany’s start-up scene in 2025 is characterized by growing venture capital inflows, a strong pivot towards AI-powered digitalization within regulated markets, and persistent gender gaps in founder representation. The capital requirements appear to be increasing to support deep-tech and complex sector innovation, while female founder participation remains significantly lower than male counterparts.
Technology-driven startups in Germany are increasingly relying on AI tools for tasks such as inventory management, compliance, and customer interaction, shifting focus towards AI-driven, regulation-ready, locally tailored solutions in sectors like finance, mobility, and healthcare.
Education and self-development play a crucial role in encouraging entrepreneurship, with more emphasis placed on financial education to increase the likelihood of starting a business, as highlighted by Dirk Schumacher, Chief Economist at KfW. The rise in preference for self-employment among younger generations (36% of 18-29-year-olds) indicates a growing interest in jobs and opportunities in the startup sector.
