Only about half of the startups surveyed would choose to establish a company in Germany again, according to current findings. This is the result of a survey conducted by the digital association Bitkom among 133 tech companies at the beginning of the year. The reasons for this skeptical assessment include a weak economy, a lack of venture capital, and structural location problems that hinder growth and expansion. While some companies have been able to improve their situation, others report increasing risks, even facing the threat of insolvency within a year. At the same time, domestic investors are often lacking in large funding rounds, which is why many startups remain dependent on foreign capital. (welt: 24.02.26)
Startups are increasingly critical of Germany as a business location
The results reveal a divided opinion. Only 50 percent of founders would start their businesses in Germany again, while 20 percent would now prefer another EU country. A further 11 percent would even opt for a location outside of Europe. The USA is also not considered a preferred alternative, as only seven percent of respondents would choose to go there in retrospect.
This development illustrates that dissatisfaction does not automatically lead to relocation. Many companies still see opportunities in the German market, but economic uncertainty, bureaucratic hurdles, and investor reluctance are hampering business development. Therefore, industry representatives are calling for targeted improvements in financing and regulation.
Economic Situation Remains Contradictory
Assessments of their own business situation are mixed. Around 35 percent of the surveyed companies report an improvement in the past year, while 30 percent see a deterioration. Another 35 percent perceive no change, indicating an overall stagnation.
The view of the general situation in the industry is considerably more critical. Only 19 percent foresee an improvement in the framework conditions for 2026, while 37 percent expect a deterioration. At the same time, approximately one in eleven companies fears insolvency within the next twelve months, which is why uncertainty in the industry is noticeably increasing.
Lack of Capital Hinders Growth and Expansion
A key problem remains financing. After their founding, young companies often receive initial funding, but gaps arise when larger sums are needed for growth. Therefore, many startups have to rely on international investors for expansion phases. The German Startups Association has long criticized Germany for lagging significantly behind other countries in venture capital.
The differences are substantial. In 2025, more than €700 per capita flowed into startups in the USA, almost €300 in the UK, and over €100 in France. In contrast, Germany didn’t even reach €90 per capita. This difference directly impacts scalability, the pace of innovation, and international competitiveness.
Calls for Political Reforms
Bitkom President Ralf Wintergerst describes the situation clearly: “Many startups are making progress, but just as many are struggling with the difficult economic climate.” He is calling for better access to public contracts, less regulation, and more opportunities to use data for innovative technologies.
The industry therefore sees a need for political action. While Germany has built a competitive startup system, challenging economic times are exacerbating existing weaknesses. Without targeted measures, innovative companies could reduce their growth plans or prefer locations with better financing conditions.