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Austria's startup boom hits record high despite funding challenges in 2025

Young founders are reshaping Austria's economy, but can new policies unlock the capital they need? A €500M fund may hold the key by 2027.

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The image shows an open book with a map of the Austrian possessions in the Netherlands and Low...
The image shows an open book with a map of the Austrian possessions in the Netherlands and Low Countries. The map is detailed and shows the various countries and regions of the region. The text on the book provides further information about the possessions.

Austria's startup boom hits record high despite funding challenges in 2025

Austria's startup scene is growing rapidly, with a record number of new businesses registered in 2025. Over 39,978 companies were founded, marking a 9.4 percent rise from the previous year. Flexibility, independence, and higher earnings remain the top reasons for entrepreneurs to launch their ventures.

However, the sector faces challenges, including tighter funding conditions and a drop in international investment last year.

The Austrian government has taken steps to boost startup growth by approving a new Rot-Weiß-Rot Scale-up-Fonds in September 2025. This fund of funds, set to launch in early 2027, aims to mobilise up to €500 million from institutional investors like pension funds and insurance companies. Its goal is to provide private risk capital for startups and small and medium-sized enterprises (SMEs).

Despite the funding pressures in 2025, the startup sector still contributes significantly to the economy. Austrian startups generated €3.33 billion in direct value added, with a multiplier effect of 1.75. Yet, investment activity slowed, with only four deals exceeding €10 million—down from seven in 2024—and no funding rounds surpassing €50 million.

The profile of founders is also shifting. The average age of entrepreneurs has dropped slightly, with noticeable growth among those under 20 and in the 20-to-30 age bracket. Industry leaders, however, stress the need for further improvements, including reduced bureaucracy, better access to capital, and stronger opportunities for young founders to sustain this momentum.

The new Rot-Weiß-Rot Scale-up-Fonds is expected to ease funding constraints when it becomes operational in 2027. With a record number of startups registered in 2025, the sector's economic impact remains substantial. Yet, continued support and policy adjustments will be key to maintaining growth in the coming years.

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