According to the KfW venture capital dashboard, German startups started 2026 with a higher financing volume. In the first quarter, they raised 1.7 billion euros in venture capital. According to the KfW report, this represents a 6 percent increase compared to the first quarter of 2025. According to KfW Research, the development was not based on individual mega-deals; instead, the volume resulted from stable development across the board in the market, not only in the Munich startup ecosystem but also across regions.
International investors provide most of the capital
International investors played a larger role in financing German startups in the first quarter of 2026 than in previous quarters. More than three-quarters of invested capital came from abroad. In the two previous quarters, the share was around two-thirds each. Investors from the USA provided the most important capital source with 34 percent of invested capital.
Dirk Schumacher, chief economist at KfW, says:
“The consistently high interest from abroad in German startups is not a given in view of ongoing trade and geopolitical risks.”
Schumacher interprets the development as an expression of high investment activity by American investors and sustained confidence from international capital providers in Germany as a technology and entrepreneurship location.
In terms of the number of deals, the healthcare sector led the way. Startups in this segment accounted for 18 percent of closings. Fintechs followed with just over 15 percent.
AI share exceeds previous year average
Startups focused on artificial intelligence also remained an important part of the market. German startups with AI-based applications raised 967 million euros in 71 financing rounds in the first quarter of 2026. This meant that 58 percent of the total market volume went to AI startups. The share was significantly above the 2025 full-year average of around 43 percent.
At the same time, KfW Research points to differences from other venture capital markets. In the USA, four market leaders in the AI sector raised a combined 188 billion dollars in the first quarter. Individual AI startups in Great Britain and France also recorded billion-dollar financings.
Schumacher’s assessment:
“The global market environment remains difficult.”
In the medium term, rising interest rates could put pressure on the venture capital market. Higher interest rates make it harder for venture capital investors to raise capital. KfW therefore expects no strong increase in investments across the board in the German venture capital market in the coming months.
