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The latest German Startup Monitor report for 2023 shows a declining sentiment in the German startup ecosystem. With a value of 38.1 points, the startup business climate is 14.1 points below the value of 2021 and close to the second lowest level since the pandemic shock of 2020. This negative development is confirmed by 65% of the founders:inside, who have difficulties in assessing the future situation.
The willingness of business angels and VC funds to invest in startups is rated as good by only 15% of the Gründer:innen.As a result, 23% of startups have postponed planned financing rounds.A trend toward profitability is also evident.
Despite the many challenges, only 15% of startups have laid off employees in the past year. The Berlin ecosystem in particular has been hit harder, with 24% of Berlin startups cutting jobs.
The business situation is described as difficult to assess by 65% of the startups surveyed. Assessments of the current business situation are at their lowest point since the start of the Corona pandemic in 2020, and while business expectations are rising slightly, they are still well below the level of 2021.
Investment activity in German startups has declined noticeably compared to the records set in 2021 and the first half of 2022. Nevertheless, it is above pre-Corona levels. Larger financing rounds above €250 million have become rare, indicating continued uncertainty in the investment environment.
The respondents show a skeptical attitude towards the investment readiness of business angels and VC funds, with only 15% rating it as good.Nevertheless, 38% of the founders expect better investment conditions in the coming six months.
Despite the challenges, most startups did not lay off any employees last year and are focusing on further growth. Especially in Berlin, a more late-stage and funding-dependent ecosystem, job cuts and adjustments are more common.
The report makes clear that startups remain important engines for the German economy despite the difficult situation. The findings are based on a broad database of 1,825 startups surveyed between May and July 2023. This report is a preview of the German Startup Monitor 2023, which will be published on Sept. 25, 2023. The study was prepared in collaboration with the Startup Association, PwC Germany and Prof. Dr. Tobias Kollmann from the University of Duisburg-Essen (netSTART)
Experts warn that OpenAI is at risk of bankruptcy due to the high fixed costs for the chatbot ChatGPT. The company's user numbers plummeted in the summer. CEO Sam Altman had already pointed out the chatbot's high operating costs in December 2022, which have risen to $700,000 a day. Despite these costs, the chatbot is not yet profitable.
OpenAI's losses doubled to $540 million in May 2023. A Microsoft investment of ten billion dollars is helping to stabilize the situation for now. However, it is unclear how long this financial support will last.
In addition, OpenAI is suffering from a decline in user numbers. Chatbot ChatGPT saw a twelve percent drop in users within a month. The number of users dropped from 1.7 billion in June to 1.5 billion in July, according to SimilarWeb.