Munich narrowly misses out on the top 3 in the Global Tech Ecosystem Index.

International startup attention often focuses on a few global megahubs, but the current Dealroom Index tells a different story. Europe's strength increasingly lies in specialized tech ecosystems with a high density of innovation. Alongside London, Paris, and Stockholm, research-oriented locations such as Cambridge, Lausanne, and Munich are gaining in importance.

Dealroom measures not only the absolute size of a startup location, but also its innovation performance relative to population size. Factors assessed include startup activity, unicorns, company valuations, and networking with universities and research institutions.

Germany is gaining importance in deeptech and strategic technologies.

With regard to Germany, the Global Tech Ecosystem Index shows that the local tech ecosystems are gaining momentum internationally, particularly due to Europe's stronger focus on deeptech, strategic autonomy and research-based innovations.

According to Dealroom, the results underscore that Germany is expanding its position in next-generation technologies, and this is happening in an increasingly intense competition between the US, Europe, and China.

Munich is establishing itself as a European Defencetech and Deeptech hub

The European ranking of "Density Leaders" should be particularly pleasing for Germany, as Munich ranks fifth in this category, behind Cambridge, London, Stockholm, and Ghent. According to Dealroom, this places the city among the most productive innovation ecosystems in Europe relative to its population.

Munich's ranking in other categories is also impressive. In the overall global ranking, Munich achieves 24th place, and 19th among the world's "density hubs." Berlin ranks 22nd globally and remains one of the most important European locations for AI, fintech, and enterprise software.

The decisive factor is primarily the dynamics in the deeptech and defensetech sectors. Companies such as Helsing or Arx Robotics According to Dealroom, they raised more than €650 million last year alone. This increasingly establishes Munich as a central location for security-relevant technologies and industrial innovations in Europe.

In addition, there is the close collaboration with research institutions such as the Technical University of MunichA strong focus on engineering and the industrial base in Bavaria. It is precisely this combination of research, capital, and industry partnerships that distinguishes Munich from many traditional consumer tech hubs.

Jan-Hendrik Boelens, Co-founder and CEO of Alpine Eagle, sees this as a structural advantage of the location:

“Munich has rapidly become a key hub for Europe’s next generation of defense and deep-tech companies. What makes this ecosystem so unique is the combination of engineering talent, advanced manufacturing, and the growing recognition that the continent needs to build more of its own strategic capabilities. The city also benefits from its proximity to the Technical University of Munich, one of the world’s leading technical universities, which helps ensure a strong supply of technical professionals. For Alpine Eagle, growing here means we can scale quickly while remaining closely connected to the industrial and technological foundations that Europe needs to strengthen its long-term security and sovereignty.”

But what is the situation in the rest of Europe?

In a pan-European comparison, London has once again taken the top spot among Europe's tech ecosystems, displacing Paris from first place. The British capital ranks fourth worldwide among the "Global Champions."

The main drivers of this growth are massive investments in artificial intelligence. According to Dealroom, over €6 billion (around $7 billion) flowed into London AI startups in 2025. This represents a substantial increase compared to the previous year, when it was just under €3.3 billion ($3.9 billion). Overall, tech companies in London raised over €15 billion ($17.8 billion) in funding recently. This is a 45 percent increase compared to 2024.

Paris remains one of Europe's most important AI hubs. The French capital recently attracted almost €4.3 billion ($5 billion) in venture capital funding and is home to companies like Mistral and Mirakl.

Europe's competitive advantage lies in research and specialization.

What is striking about this year's ranking is the geographical breadth of European innovation centers. Unlike in the USA, the European startup landscape is not concentrated exclusively in a few dominant centers.

Instead, high-performing ecosystems often emerge around universities, technical talent, and specialized industries. According to Dealroom, sectors such as AI, biotech, climatetech, advanced manufacturing, and defensetech particularly benefit from this close integration of research, industry, and entrepreneurship.

In addition to established hubs, new locations are also gaining momentum. Dealroom lists Istanbul, Kyiv, Zagreb, Athens, and Sofia among others in the "Rising Stars" category.

Bavaria's Digital Ministry sees it as "Europe's digital powerhouse"

Bavaria's Digital Minister Fabian Mehring sees the development as a success of Bavaria's high-tech strategy. Munich is rapidly developing into a digital powerhouse of Europe, he said. MehringKey factors include AI investments, cutting-edge research, and a growing innovation ecosystem.

Investors also see this as a structural change. Bobby Jäckle, partner at Visionaries, emphasizes the increasing European cooperation in strategic technologies.

“Europe’s technological strength has never been based on a single city or country. Rather, it is based on the depth and diversity of the ecosystems from which globally relevant companies are emerging across the continent. […] What is particularly exciting is how Europe’s technical talent, research strength, and industrial base are coming together to make the continent a serious force in AI, software, and strategic technologies.”

The "Dealroom Global Tech Ecosystem Index“ evaluates cities based on three criteria: “Global Champions” (size), “Density Leaders” (per capita performance) and “Rising Stars” (growth), thus providing a multifaceted overview of the global innovation landscape.
This year's index assesses 315 tech ecosystems in 77 countries. Last year, it included 288 cities, reflecting the continued expansion of global innovation hubs. The methodology focuses on venture capital investments, company value creation, unicorns, ecosystem dynamics, and university connections.