Report: More German start-ups, but figures much lower than before

The number of business start-ups in 2024 rose by 3% compared to the previous year, reaching 585,000. But that increase pales in comparison to the number of start-ups 10 years ago, when there were well over 800,000, the KfW noted. More than 20 years ago in 2004, there were nearly 1.4 million new start-ups.

“Despite the minor increase last year, we must acknowledge that start-up activity in Germany has been moving sideways since 2018,” said economist Georg Metzger, start-up expert at KfW Research.

The increase, the bank said, is from people who have started a business as sideline to provide a second source of income.

Start-up as a sideline

The bank's preliminary analysis, published in its Start-up Monitor, showed that 115 out of 10,000 adults aged 18 to 64 became self-employed last year. In 2023, this figure was 110.

Eight out of 10 entrepreneurs started their business alone, while only a 25% hired employees right from the start.

The analysis, which is based on a survey of 50,000 people, identifies the more difficult situation on the labour market as a major reason for the recent slight increase in the number of start-ups.

Almost one third (31%) of entrepreneurs said they would actually prefer to be a salaried employee and only saw self-employment as a temporary episode to achieve a higher income, implement a business idea or advance their own career.