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 coronavirus crisis year 2020. This is shown by the business climate published by the German Startups Association in Berlin on Tuesday.

While the current business situation has improved slightly, expectations have become much gloomier. Only just over one in two startups (54.2%) expect business to develop positively, almost 18 percentage points less than a year ago (72.1%). This means that the current figure is below that of the coronavirus crisis year 2020, when a good 58% of young companies still had positive business expectations.

The political and economic turmoil and the changed environment on the financial markets have led to caution among investors, especially in late-stage financing rounds, said Gesa Miczaika, Deputy Chairwoman of the association. "As external capital is essential for start-ups, this is currently causing uncertainty." However, the start-up ecosystem is proving robust.

Overall, the business climate in the German start-up scene has fallen from 52.2 to 42.2 points compared to the previous year and is therefore still above the coronavirus low. Almost 2,000 start-ups were surveyed in May and June. The business climate for the sector 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%) and a shortage of skilled workers (35.3%) as the main obstacles.

German start-ups, which rely on money from investors such as venture capital funds or corporations for their expansion, have had a great time. During the pandemic, they benefited from the fact that digitalization received a boost - for example in financial transactions, online shopping or food delivery. Investors were also flush with money. Some large start-ups therefore received financial injections in the high three-digit million range in 2021.

But with the war in Ukraine and rising interest rates, the market has turned. The shares of large tech companies plummeted and German start-ups cut jobs by the dozen. The Berlin-based e-scooter provider Tier recently announced 180 job cuts.

Now the picture is divided: For financial start-ups, which are heavily dependent on the general economic and financing situation, the mood is particularly gloomy, it was said. For HR 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 slowdown.