KfW: Business Startups in Germany Increased Significantly in 2025
In 2025, approximately 690,000 new businesses were founded in Germany, marking a substantial increase from the previous year. The growth was primarily driven by side-income businesses, which reached a record high proportion.
Berlin – Business startup activity in Germany experienced a significant increase in 2025, according to KfW Research. The number of new businesses founded reached approximately 690,000, an increase of 105,000 compared to the previous year. The founding intensity, or number of startups per capita, rose from 115 to 136 per 1,000 individuals aged 18-64.
The primary driver of this growth was the rise in side-income businesses. The founding intensity for side-income businesses increased from 75 to 95, translating to about 483,000 new ventures. In contrast, the founding intensity for full-time businesses remained largely unchanged for the third consecutive year. Consequently, side-income businesses accounted for a record 70 percent of all new business formations.
Dr. Dirk Schumacher, Chief Economist at KfW, suggested that rising living costs and a more challenging job market could be contributing factors to the increase in side-income startups. "Access to the labor market has become more difficult, and even small side jobs are no longer easy to find," Schumacher stated. "Self-employment can offer an alternative for generating additional income in this situation."
Despite the rise in side-income ventures, a majority of entrepreneurs in Germany still prefer self-employment. Two-thirds fundamentally favor entrepreneurship over being employed. This preference is also evident among side-income founders, although at a lower percentage compared to full-time founders. The research indicated that 24 percent of new businesses employed staff, with solo-founded businesses making up 86 percent. Only ten percent of these startups involved the acquisition of existing companies. Schumacher emphasized the importance of ensuring continuity within the business landscape, including succession planning for the significant number of medium-sized companies seeking buyers, for Germany's economic stability.