Weak economy, cautious investors and a lot of uncertainty: According to a new study, start-ups in Germany are even more pessimistic about the future than in the Corona crisis year 2020. This is shown by the business climate published in Berlin by the Federal Association of German Startups.

While the current business situation has improved slightly, expectations have clouded over significantly. Only every second start-up (54.2 percent) expects business to develop positively, almost 18 percentage points less than a year ago (72.1 percent). The current value is therefore below that of the Corona crisis year 2020, when a good 58 percent of young companies still had positive business expectations.

The political and economic upheavals and the changed environment on the financial markets led to reluctance among investors, especially with late-stage financing rounds, said Gesa Miczaika, deputy chair of the association. "Since external capital is elementary for start-ups, this is currently causing uncertainty." However, the start-up ecosystem is proving to be robust.

Start-ups benefited from the pandemic

Overall, the business climate in the German start-up scene fell from 52.2 to 42.2 points compared to the previous year and is thus still above the Corona low. Almost 2000 start-ups were surveyed in May and June. The business climate for the industry is calculated in the same way as the well-known barometer of the Munich Ifo Institute. According to the study, start-ups see financing bottlenecks (43.8 percent) and the shortage of skilled workers (35.3 percent) as key obstacles.

German start-ups that depend on money from investors such as venture capital funds or corporations for their expansion have had a good time. During the pandemic, they benefited from the fact that digitization was given a boost - for example in financial transactions, online shopping or food deliveries. The money was also loose with investors. Some large start-ups therefore received financial injections in the high three-digit million range in 2021.

Tech stocks plummeting

But with the Ukraine war and rising interest rates, the market has turned. Shares in large tech companies initially plummeted, and German start-ups cut jobs in droves. The Berlin e-scooter provider Tier recently announced that 180 jobs would be cut.

Now the picture is divided: In the case of financial start-ups, which are heavily dependent on the general economic and financial situation, the mood is particularly gloomy, it said. In the case of personal start-ups, on the other hand, which are helped by the competition for skilled workers, the current situation is positive, but there is great concern about an economic downturn.