Founding of green startups slows in Germany

The growth of Germany's community of startups with a focus on sustainability has slowed considerably in 2025. Last year saw the foundation of 206 green startups, down from a peak of 375 in 2023, said a report by business think tank Borderstep Institute. 

The foundation of new green startups increased their total number in the country by six percent to almost 4,700. "Although the overall community of green start-ups has continued to grow, their relative importance is declining," the report said. "While the share of green start-ups among all new companies founded was just under 20 percent in 2023, it has fallen significantly to 13 percent by 2025."

Green startups are an important factor for emissions reductions and the broader economy, given that they are typically characterised by a high patent rate, above-average research intensity, and their solutions reduce carbon emissions by more than 70 percent compared to conventional technologies, the report said. 

The authors warned that shifts in public and political attention, as well as regulatory uncertainties, are hindering further growth in green tech. 

The founding of new startups was heavily concentrated in a few hotspots last year. More than half of all green startups were founded in three states: Berlin (19.9 percent), Bavaria (19.5 percent), and North Rhine-Westphalia (15.9 percent). 

The authors called on the government to boost the green startup community by explicitly recognising their economic and environmental relevance in its new start-up and scale-up strategy, creating reliable framework conditions, and prioritizing the promotion of GreenTech innovations.