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Just over a third of all start-ups in Germany are part of the green economy, according to a by the Borderstep Institute and the German Start-up Association.  “At 35 percent, the share of green companies among German start-ups has made a significant leap compared to the previous year (29%) and reached a new high,” the Institute said. Difficulties in raising capital remains a major problem for the young companies, according to the Green Startup Monitor, which is based on surveys among the companies. “Forty-six percent of green start-ups see the issue of raising capital as a key hurdle, significantly more than in the previous year (37%) and among non-green start-ups (34%).” Green start-ups also raise capital from business angels less often (29%) than non-green start-ups (35%), but they more regularly turn to state programmes (50 %) than non-green start-ups (45 %), the report found.

A focus of this year’s report is that a large and rapidly growing group of green start-ups target business success and positive impact at the same time. “They want both – profit and meaning,” said Borderstep Institute’s Klaus Fichter, who called this double ambition a “new species of start-ups”. He also stressed that, in contrast to what many people think, there is no contradiction between fast growth and social orientation. But the surveys revealed that only a few green start-ups can prove their sustainability impact with data and facts, while an increasing number of investors also demand positive impacts in addition to a promising business strategy. “Many start-ups need to learn how to measure impact,” Fichter said. He also called for regulatory action on this issue. “For example, we need standards for measuring a company’s CO2 footprint. This would also give start-ups more certainty. The current regulation is too vague and can lead to greenwashing.”

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. Thanks to its vibrant green start-up scene, the country has been dubbed a "Green Energy Valley" in the past.