According to the KfW Venture Capital Dashboard, German startups started 2026 with higher funding volumes. In the first quarter, they raised €1.7 billion in venture capital. According to the KfW report, this represents an increase of 6 percent compared to the first quarter of 2025. KfW Research The development was not based on individual mega-deals; instead, the volume resulted from a stable development across the entire market, not only in the Munich startup ecosystem but also nationwide.
International investors provide the majority of the funds
International investors played a more significant role in financing German startups in the first quarter of 2026 than in previous quarters. More than three-quarters of the invested funds came from abroad. In the two previous quarters, the share was around two-thirds. Investors from the USA, with 34 percent of the invested funds, represented the most important source of capital.
Dirk Schumacher, Chief Economist of KfW, says:
"The consistently high level of interest from abroad in German startups is not a given in light of ongoing trade and geopolitical risks."
Schumacher interprets the development as an expression of high investment activity by American investors and continued confidence by international investors in Germany as a technology and start-up location.
The healthcare sector led in the number of deals, with startups in this segment accounting for 18 percent of the transactions. Fintechs followed with just over 15 percent.
The AI share is above the previous year's average.
Startups focused on artificial intelligence also remained an important part of the market. German startups with AI-based applications raised €967 million in 71 funding rounds in the first quarter of 2026. This represented 58 percent of the total market volume for AI startups. This share was significantly higher than the average for the entire year of 2025, which was around 43 percent.
At the same time, KfW Research points to differences compared to other venture capital markets. In the US, four market leaders in the field of AI raised a total of $188 billion in the first quarter. Individual AI startups in the UK and France also secured billions in funding.
Schumacher's assessment:
"The global market environment remains difficult."
In the medium term, rising interest rates could... Venture capital market Higher interest rates are putting a strain on the economy. They make it more difficult for venture capital investors to raise capital. KfW therefore does not expect a significant increase in investments across the German venture capital market in the coming months.
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