The German startup ecosystem is off to a strong start in 2026: Between January and June, 3,053 new startups were founded. This represents a 52 percent increase compared to the second half of 2025 and means more startups were founded than in all of 2024.
I have mainly been seeing AI and defense companies in the German tech market. Not the kind of companies we need.
Which would you need?
An AI that can respond and receive fax messages…
Companies focused on digital sovereignty. The EU, both companies and end users, are completely dependent on US software and operating systems. There is a bit of movement around governments using Linux, but there is nothing happening around replacing iOS and Android.
You already have iode, /e/, Graphene OS and Jolla. How many other startups do you need? The problem is not lack of software. What is needed is legislation to force compatibility with de-googled phones. It’s up to EU, not startups.
Also, EU needs sovereignty in defense badly. It’s hard to fight American corporations when you still need US to defend you. Defense startups are welcome.
Germans are the least trustworthy partners when it comes to military. So no, we don’t need them to create new ways to slaughter their neighbours.
We still don’t have an EU replacement for Visa/MasterCard, Intel/amd, nvidia/amd, but building these takes more than a couple of chatgpt prompts
Germany bad!
Germany bad! truely is your best argument.
Germans are the least trustworthy partners when it comes to military.
Why? Because of what happened 60 years ago? Or do you have more recent examples?
60?
- Time flies.
Wero?
MSI/VIA (Taiwanese), could also play in on ASML and contribute to making their own chips.
Exactly!! It’s a government policy and regulatory problem, not a market problem.
We should avoid a military-industrial complex, though. So the defense must be nationally owned.
GrapheneOS is leading Android custom rom, but it isn’t a startup and doesn’t support much hardware.
The others are LineageOS based and have weak points when it comes to security, privacy, and frequency updates.
All Android custom roms are still directly tied to Google’s software development (AOSP).
Sailfish OS (Jolla) is Linux based, but is proprietary, so not really an open platform.
So seems like Jolla is the only company really developing an independent mobile OS.
So? You think someone is going to fund a startup and develop a fully independent, fully open source phone OS that will support modern hardware and all the apps stock Android does? Of course not. Jolla, Graphene OS and LineageOS show what a small company can currently do. You also have Ubuntu and Postmarket OS, Fairphone, Murena and couple more. Between them they cover all the niche markets: security, privacy, open-source, Android alternative and independent hardware. No one is investing heavily in them because those markets are really small. New startup trying to develop something from scratch makes no sense.
Like memlog? https://www.sprind.org/en/actions/projects/memlog
It competed in a challenge to replace the whole von Neumann architecture.
If I wanted to build any sort of US software competitior, I would go out and claim it is insanely AI to get funding.
One that builds affordable housing?
That’s a political problem. Most voters don’t want housing to be affordable. Urban development is in the hands of councils mostly.
Please provide sources for your claims, that „most voters don‘t want housing to be affordable“ and „urban development is in the hands of councils mostly“. You can use websearch.
For me, my impression is different, considering Deutsche Wohnen & Co. enteignen and the state‘s reaction not to consider the public‘s interest, but to instead change expropriation laws to block the possibility to let it happen by demand of the common folk.
Maybe it‘s a systemic problem, have you considered that?Nevertheless, wouldn’t they be needed?
But why do you think German voters doesn’t want affordable housing?
Because the voters are mostly old people who have better rental agreement prices (differences of hundreds of euros) or landlords.
Sounds believable but it feels like you’re just assuming this for Germany. Affordable housing is and was a big issue in all elections I remember. It’s a major point for more than half the political parties and it’s a topic regularly covered by German media. On top, we have the second lowest number of home owners in Europe…
So I would still say, a startup that can create affordable housing, would be much needed in Germany 😅
Enabling a leisure society.
Artificial intelligence is the key driver of the boom: 1,038 of the newly founded startups have a clear AI focus—more than one in three—and thus more than in all of 2025. The software sector remains by far the strongest industry, with 844 new startups. But the boom is also evident in other fields: Medicine (274) and the food sector (181) are among the sectors with the highest number of new startups—AI applications and related technological advances are also key drivers of development here.
I wonder if the “fake it (with AI) until you make it” will have similar or worse success rate than before AI. Startups sure didn’t wait for AI to produce bullshit.
Measuring the number of new startup’s as a success factor is IMHO very stupid. I once started a startup. Starting a startup is not that difficult. Keep that startup running past the five year mark, then you may start to talk about success…
Yes, but for germany this might be a metric for reduced bureucracy. Failing a startup is always easy, but starting a startup in germany might not be trivial.
Otherwise I agree.
It is very easy. Can be done within a week for a capital based company and even faster with a personal liability company.
Source: Am a Founder.
It would be nice to see more worker owned startups. I guess that’s too much to ask though.
The recent Merz gov reforms include a change of shareholder laws so that employees can be paid in shares
The amount of nihilistic, anti-German views (which are even mostly unrelated to the topic) is very telling imo. And more so as the views come in parts from accounts that post almost exclusively comments seeking to criticize Europe while hailing China and Russia if I may say so.
And you’re spouting paranoid twaddle.
Because they‘re the account with the anti Russia and anti China focus. That’s what they spam the main communities with and just cannot accept a negative image of Europe. Pip (OP) has more of a pronounced positive focus directly towards Europe, Germany, but surely free markets, and also just cannot except a negative spin.
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This is NOT good news. It is actually bad news.
A lot of these startups are founded by people who have recently been fired or otherwise made redundant. The survivability of these companies is questionable.
Additionally there are on going issues that the relatively quick process of starting up a company is used by organised crime in money laundering (e.g. Chinese Prato based structures) - there are estimates that these use thousands of shell companies that vanish after months
Just looking at the number of startups is a very very bad metric. Much more interesting would be:
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Gross revenue in the first year
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Average employees per Startup (a lot of these are single employee companies)
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Reported profit per company after one year
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Lifetime of startup companies
I am afraid a lot of these metrics will be really really bad looking.
Despite what people think founding a company is easy in Germany. You can do found a limited liability company with basically only the notary costs+1€. I had mine started in a week at the beginning of Covid. Getting a notary appointment is the hardest and most expensive part and that is only necessary for a limited liability company. Otherwise? Generate a few documents and send them in. You can do that electronically these days if you can sign via eIDAS.
No issues.
Bureaucracy comes later.
The German mandatory old age insurance comes to check in. Oh…you are building a new company, are the only employee or have very little employees and only have two clients so far? Yeah fuck you that’s dependent employment and you are not a actual company. They can even decide in one year it’s not and then come back next year and decide differently.
The workers comp deciding seemingly randomly when they come to check you actually do things the way they want.
The tax office is a different matter as well. (Mine is actually somewhat cooperative and nice. Other’s aren’t)
And don’t get me started on the sheer lack of competence in the German banking system. I operate outside Germany as well and the difference is staggering.I happily let someone pull a teeth out of my jaw without anaesthesia or deal with the tax office every day if I could avoid those. With my Italian and Swiss banks? No issues.
Source: Founder - 6 years ago. Still hating it. Worst and best decision of my life.
Worker rights are important too though!
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How many of those startup’s are one person delivery contract firms, exclusively working for Amazon?
Yeah but most of these startups were founded because people fear for their job and want a redundancy…
Or have been made redundant and now use their severance.
Isn’t that kinda what you’d want to see though? I.e. if older less competitive businesses are not able to operate or compete, we don’t want them to just hold onto talented people, and we don’t want those talented people to be jobless. It’s good if those people go and start new, dynamic, competitive companies.
Obviously there’s a balance to be found, and we don’t want companies to be allowed to just dump employees for no reason every time they hit a hiccup, but Germany has very generous worker protections, and a strong social safety net. It’s good to see these people starting new companies.
Verena Pausder comments: “To create global champions ‘Made in Europe,’ we need a strong European capital market.
She should start a startup to fund startups.
Though the easiest way would be to overvalue a company, e.g. an electric car company, which allows its investors to borrow against the shares and invest that money in new startups.
Unfortunately, Europe doesn’t make it easy to borrow against shares yet. /s
Or one expands typical funding channels. Why do you think that investment is a bad thing?
I don’t think that. This was an attempt at questioning the value of Tesla with a dash of conspiracy theory.
Europe has to expand the channels but the safer laws make it more difficult, which is the right thing. Otherwise we can expect that our banks have to be rescued soon.
Many laws in Europe are not about risk aversion, even though they are perceived like that (and there’s a media obsession with this trope).
Forbidding pension funds from using certain investment types does not reduce long term risk, it only reduces short term risk.
The real problem in Europe is that it ingested neoliberalism much more deeply than one might think. One consequence is that Europe has an ideologically motivated short term investment horizon.
Another consequence of this ideological stringency in Europe is that Europe has subsidies (by GDP) that are about half as big as US subsidies and a fourth of China’s.
Many european countries have a more than twice as large share of outsourced state tasks as the US.
Etc. Etc.
Many laws in Europe are not about risk aversion, even though they are perceived like that
Which laws would you change?
The Alternative Investment Fund Managers Directive (AIFMD) - Directive 2011/61/EU.
https://en.wikipedia.org/wiki/Alternative_Investment_Fund_Managers_Directive_2011
Many laws in Europe are not about risk aversion, even though they are perceived like that (and there’s a media obsession with this trope).
You are right, no mentioning of any problems. What are the problems?
Well, a big problem is that many pension funds cannot invest into firms.
