Share of green start-ups in Germany rises to 30 percent – monitoring report

The share of green start-ups has risen to 30 percent of all start-ups in Germany in 2020, according to a monitoring report by the Borderstep Institute and the German Start-up Association, funded by the German Federal Environmental Foundation (DBU). Green start-ups make a significant contribution to environmental and social sustainability, in addition to generating positive economic effects, the report states. “Start-ups are the ones who introduce fundamental environmental innovations to the market as pioneers. Green start-ups therefore have a key function as drivers of sustainable transformation," said David Hanf, vice president of the start-up association. At the same time, sustainable start-ups continue to run into significant challenges, in particular the difficult access to capital, according to the report. Every second green start-up reports difficulties with raising capital, said Yasmin Olteanu, research fellow at the Borderstep Institute. “There is a particularly large gap between reality and what's desired, especially in early-stage financing and venture capital - and a much larger one compared to non-green start-ups,” Olteanu said. The authors of the report therefore call for political action, demanding the development of a “sustainability” funding programme and the expansion of state venture capital funding.

In Germany, many start-ups take advantage of the energy transition by bringing novel business ideas to market and by snatching market share from incumbents in sectors such as renewables, heating or mobility. The green start-up scene is so lively the country has been dubbed a "Green Energy Valley".