Germany’s startup sector is producing a growing number of companies valued at over €1 billion ($1.14 billion), partly driven by the artificial intelligence boom, according to an annual study.

The research by the German Startup Monitor shows that about €8 billion in venture capital has flowed into startups by the end of September 2026, surpassing the approximately €7.5 billion invested throughout the whole of the previous year.

By the end of September, 10 new startups have achieved a company valuation of at least €1 billion – so-called “unicorns” – according to the report, which has been published yearly since 2013.

The data analysis and survey of more than 1,800 growth companies is to be presented in Berlin on Monday by the German Startup Association.

With a total of 39 unicorns, Germany has reached a record level, the report said.

These include major names such as online broker Trade Republic, smartphone bank N26 and software firm Personio. New additions this year include software company Osapiens, Neura Robotics and defence firm Stark Defense.

“Germany is founding [new companies] again – broadly and on a strong technological basis,” said Verena Pausder, chairwoman of the association.

For the purposes of the study, startups are defined as companies that are less than 10 years old, offer innovative products or business models, and have strong ambitions for growth.

Defence and AI key drivers

The startup sector is benefiting from rising investment in defence companies, including Quantum Systems and Helsing, which are attracting large sums from investors.

AI is a further growth driver. For 53% of the startups surveyed, the technology is central to their product – up from 39% in 2024. At the same time, AI is said to be making it significantly easier to found companies.

The report also highlights weaknesses in the startup sector. Capital flowing in was said to be concentrating more heavily at the top. “Across the board, the number of financing rounds is around a quarter below the 2021 level.”

Some 89% of founders surveyed called for more venture capital from Germany and Europe.

“The available capital is not sufficient to make the leap to the top of the world,” Pausder said.

International strategy

A majority of startups (62%) also said they would prefer the United States for a potential stock market listing, with only 27% favouring Germany. And for digital technologies, 64% said they relied predominantly or entirely on US providers – partly due to a lack of European alternatives.

The government must implement its startup strategy and make financing easier, Pausder said. She added that company formation within the EU must be simplified.

The association sees strengths in the sector’s links with universities. Every second startup (51%) was said to be supported by research institutions, and for 59% the product was said to stem from new scientific findings.

Universities are the most important pillar in the ecosystem, said association research expert Alexander Hirschfeld. “Measured against the quality of Germany’s research landscape, however, far too few companies are still being founded from it,” he said.

The shortage of skilled workers is causing less concern among startups. Only 15% see it as a major obstacle, down from 30% two years ago. Some 83% said they planned to make new hires within 12 months.

Source: dpa.com