Tech Start-ups Defy the Covid-19 Crisis

Growing number of start-ups in Germany

The global coronavirus pandemic has failed to dampen new start-up activity in Germany, with 165,000 new companies founded in 2020 according to a joint study conducted by Creditreform and the Leibniz Centre for European Economic Research (ZEW). Notwithstanding the ongoing Covid-19 crisis, the number of companies in Germany rose slightly to almost 3.3 million in 2020. More significantly, more companies were founded than closed during the same period.

Corona aid measures decisive to new start-up activity

The measures introduced by the German government to counteract the worst effects of the economic crisis proved decisive to individual plans to press ahead with establishing a new company in 2020. Central among these were financial aid, the extended short-time working scheme and the temporary suspension of the obligation to file for insolvency. Start-up activity was of course interrupted during the period of the most severe lockdown restrictions, but was not abandoned with activities resumed later on in the year. In March, the German government also announced the launch of a new “Future Fund” funding instrument that will primarily benefit start-ups with high capital requirements in the growth phase.

Number of tech start-ups growing

New start-up activity was particularly brisk in the mail order and online retailing sectors where a 24 percent increase in activity – equivalent to 3,100 start-ups – was recorded. ICT manufacturers and service provider numbers rose by 5.2 percent to 7,500 start-ups, with the chemicals and pharmaceuticals also enjoying a 15.7 percent spurt or 430 new start-ups. The creation of new start-up infrastructure and an economic stimulus package by a new federal government in September will also most likely promote more start-up activity in the high-tech and tech sectors.

Start-up Germany Tour to promote country to international tech investors

A hybrid tour program through Germany’s dynamic start-up ecosystem plans to bring international investors into direct contact with innovative start-ups in the country’s resurgent start-up scene. The Start-up Germany Tour 2021 series of events throughout the summer – cumulating in a conference week in November – will highlight opportunities available in the FinTech, Industrie 4.0, smart cities, and logistics & mobility industries. Germany Trade & Invest’s Trend & Innovation Scouting Director Dr. Kim J. Zietlow, responsible for attracting start-up and venture capital projects to the country, is convinced of the value of such activities. “The findings of the Creditreform and ZEW study highlight the importance of providing innovative start-ups and investors with the necessary support to begin operations. The Start-up Germany Tour – involving more than 40 German Chambers Abroad (AHK) across all continents - is a fantastic platform for reaching out to international start-ups, promoting Germany’s industrial landscape and its thriving start-up ecosystem.”

Support for start-ups: Digital Hub Initiative

The Digital Hub Initiative, with its 12 hub locations, provides start-ups with a network made up of co-working offers, accelerator programs and support for internationalization projects. Start-ups are provided with direct access to professional partners and technology specialists as well as potential business partners and investors. The 12 specialist digital hubs serve as incubators for specific technology areas, allowing start-up founders to develop their digital products in collaboration with experts from the respective local technology clusters. Interested parties can meet the Digital Hub Initiative at events including The Next Web (Amsterdam), WebSummit (Lisbon) and Slush (Helsinki) this fall. “We look forward to meeting with international start-ups at these upcoming events and informing about the advantages of joining Germany’s tech start-up ecosystem through a presence in a Digital Hub” said Germany Trade & Invest’s Trend & Innovation Scouting Director, Dr. Kim. J. Zietlow.