Berlin Maintains Crown as Germany's Startup Capital
With 498 new startups in 2024, Berlin outpaces Munich and Hamburg combined, as venture capital continues to flow into the German capital.
Berlin continues to demonstrate its dominance as Germany's premier startup destination, according to recent data from the German Startup Association. The capital city registered 498 new startups, well ahead of Munich (203) and Hamburg (161), maintaining its position as the country's leading innovation hub.
The city's startup density tells an even more compelling story, with 13.2 new tech companies per 100,000 inhabitants - more than three times the rate of Bavaria, which has four startups per 100,000 inhabitants. This remarkable concentration of entrepreneurial activity underscores Berlin's unique ecosystem advantages.
As Lisa Ksienrzyk notes in Wirtschaftswoche: "Berlin is international, libertarian, and excels in culture and nightlife. Hip fusion cuisine instead of traditional Bavarian fare. This attracts not only potential candidates from around the world but also venture capital funds, which prefer to settle in the capital. The most important investors are predominantly gathered in Berlin-Mitte within a radius of one kilometer. This is where decisions about the future of German young entrepreneurs are made."
According to the EY Startup Barometer 2025, German startups attracted more than €7 billion in 2024, a 17% increase on the previous year. Bavaria led the way in terms of total investment volume with €2.3 billion, just ahead of Berlin's €2.2 billion. This was largely driven by several large investments in Bavaria, most notably the 450 million euro funding round for Helsing, an AI defence company headquartered in Munich, but also maintaining operations in Berlin.
While Berlin-based FinTech startups showed remarkable strength in 2024, securing 89% of Germany's FinTech investments with 463 million euros across 31 funding rounds, the city's startup landscape remains remarkably diverse. Berlin's ecosystem spans a broad spectrum, from AI, software and e-commerce to a growing number of deep-tech companies, reflecting the capital's role as a comprehensive innovation hub.
The resilience of the German startup ecosystem is evidenced by the strong performance of various sectors across the country. Software & Analytics startups attracted a total of €2.2 billion in German investment, while Healthcare startups more than doubled their previous year's investment to €958 million. The energy sector was also very active with €841 million in venture capital funding.
Looking ahead, Berlin's position appears secure, supported by its established infrastructure, international talent pool and concentrated investor presence. The city's continued growth in startups, despite market challenges, suggests that its attractiveness as Germany's startup capital remains undiminished.
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Header image: ideogram
