Startup Monitor: Munich Becomes Germany’s Number Two Startup Hotspot

The 2020 German Startup Monitor (DSM) was published today. The largest startup report in Germany presents the significant effects of the corona crisis on the German startup landscape. The latest Startup Monitor also reveals that Munich has established itself as the clear number two hotspot in Germany after Berlin.

The Startup Monitor shows the cities and states that the participating young companies come
from. During the presentation of the DSM 2020, however, Tobias Kollmann, Professor of E-
Business and E-Entrepreneurship at the University of Duisburg-Essen and academic director
of the study, emphasized that the distribution of the surveyed companies does not result in a
ranking of the German startup cities. The participants were not taken as random samples, but
were instead called upon to participate by multipliers. The different figures within the startup
cities, in contrast, can indeed by compared, and here it becomes clear: Munich is clearly the
second major startup hub in Germany after Berlin.

Startup Monitor shows a clear ranking

German startups employed an average of 14.3 people in 2020. Munich startups are twice that
size on average with 31.4 employees, and young Berlin companies come in with 35.3. The
same ranking becomes apparent in the degree of internationalization: Across Germany, 73.4
percent of startup employees are German. In Berlin, the figure comes in at just 57.3 percent,
in Munich at 63.9. In Hamburg, just under three quarters (73.2 percent) of startup employees
are from Germany. A large proportion of international employees indicates that an area is
more attractive to international professionals. Tobias Kollmann said:

“Just like unshakable optimism and the desire to make a contribution to environmental and
climate protection, diversity is also firmly rooted in the identity of many startup companies.
The commitment to diversity is an important element of the success of the startup ecosystem.”

The share of startups financed with venture capital in Munich comes in at 28.8 percent in the
Startup Monitor, putting the city in second place behind Berlin with 39.0 percent and ahead of
Hamburg with 22.1 percent. More than two thirds (67.9 percent) of the Munich startups rate
the startup ecosystem as good or very good. Only Berlin does better with 81.8 percent.
Hamburg takes fourth place with 38.8 percent after the Rhine-Ruhr metropolitan area (57.3

“Founders usually also see the crisis as an opportunity”

The study provides interesting insights into other areas as well, such as the situation for the
surveyed startups in the corona crisis. Nearly three out of four German startups feel impacted
by the crisis. Just under a third of the young companies view the business situation as
positive. Last year, more than half of the startups saw things optimistically. In comparison
with the situation of the economy on the whole, Franziska Teubert, Managing Director of
the German Startups Association, said:

“Startups, like the entire economy, are affected by the corona pandemic. However, founders
usually also see the crisis as an opportunity and are used to reacting quickly to new situations.
That is why they have a more optimistic view of the future than the German economy as a

As the biggest challenge, 68 percent of the participants named sales and customer acquisition.
That amounts to 13 percent more than in 2019, which points to the reserved consumer and
investment behavior of consumers and companies during the crisis.

Moreover, the survey results also reveal the difficult financial conditions: 43 percent consider
it challenging to raise capital, which is indicative of the tense situation on the capital markets
(2019: 38 percent). And at 32 percent, significantly more founders see liquidity as a current
difficulty (2019: 18 percent)