International startup attention often focuses on just a few global megahubs, but the latest Dealroom index tells a different story. Europe’s strength increasingly lies in specialized tech ecosystems with high innovation density. Alongside London, Paris, and Stockholm, research-focused locations like Cambridge, Lausanne, and Munich are gaining importance.
Dealroom measures not just the absolute size of a startup location, but innovation performance relative to population size. It evaluates startup activity, unicorns, company valuations, as well as networking with universities and research institutions.
Germany gains significance in deeptech and strategic technologies
Regarding Germany, the Global Tech Ecosystem Index shows that the country’s tech ecosystems are gaining international momentum, particularly driven by Europe’s stronger focus on deeptech, strategic autonomy, and research-based innovation.
According to Dealroom, the results underscore that Germany is expanding its position in next-generation technologies. And this comes amid increasingly intense competition between the US, Europe, and China.
Munich establishes itself as Europe’s defence tech and deeptech hub
Particularly encouraging for Germany is the European ranking of “Density Leaders,” as Munich lands in fifth place in this category behind Cambridge, London, Stockholm, and Ghent. According to Dealroom, this means the city is among Europe’s most productive innovation ecosystems relative to population.
And Munich’s ranking in other categories is also impressive. In the global overall ranking, Munich achieves 24th place and ranks 19th among worldwide “Density Hubs.” In the global comparison, Berlin ranks 22nd and remains one of Europe’s most important hubs for AI, fintech, and enterprise software.
The key driver is primarily the momentum in deeptech and defence tech. According to Dealroom, companies like Helsing and Arx Robotics alone raised over 650 million euros in the past year. This is turning Munich into an increasingly central location for security-relevant technologies and industrial innovation in Europe.
This is complemented by close ties with research institutions like TU München, a strong engineering focus, and Bavaria’s industrial base. This combination of academic research, capital, and industrial partnerships distinguishes Munich from many classic consumer tech hubs.
Jan-Hendrik Boelens, co-founder and CEO of Alpine Eagle, sees this as a structural advantage of the location:
“Munich has quickly become an important hub for Europe’s next generation of defence and deeptech 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, growth here means we can scale quickly while remaining closely connected to the industrial and technological foundations Europe needs to strengthen its long-term security and sovereignty.”
But what about the rest of Europe?
In the overall European comparison, London reclaims the top position among Europe’s tech ecosystems, pushing Paris from first place. The British capital ranks fourth globally among “Global Champions.”
Growth is driven primarily by massive investments in artificial intelligence. According to Dealroom, over 6 billion euros (approximately 7 billion dollars) flowed into London AI startups in 2025. A significant increase when you consider that the previous year saw just under 3.3 billion euros (3.9 billion dollars). In total, tech companies in London recently raised over 15 billion euros (17.8 billion dollars). This represents a 45 percent increase compared to 2024.
Paris remains nonetheless one of Europe’s most important AI hubs. The French capital recently achieved nearly 4.3 billion euros (five billion dollars) in venture capital financing and is home to companies like Mistral and Mirakl.
Europe’s competitive advantage lies in research and specialization
What stands out in this year’s ranking is the geographic breadth of Europe’s innovation centres. Unlike in the US, Europe’s startup landscape is not concentrated exclusively in a few dominant centres.
Instead, powerful ecosystems often emerge around universities, technical talent, and specialized industries. According to Dealroom, areas like AI, biotech, climate tech, advanced manufacturing, and defence tech particularly benefit from this close interplay of research, industry, and entrepreneurship.
Alongside established hubs, new locations are also gaining momentum. In the “Rising Stars” category, Dealroom names Istanbul, Kyiv, Zagreb, Athens, and Sofia.
Bavaria’s digital ministry sees “digital powerhouse of Europe”
Bavaria’s digital minister Fabian Mehring views the development as a success of Bavaria’s high-tech strategy. Munich is developing “rapidly into a digital powerhouse of Europe,” says Mehring. Key factors include AI investments, cutting-edge research, and a growing innovation ecosystem.
Investors also see this as a structural shift. Bobby Jäckle, partner at Visionaries, emphasizes growing European collaboration on strategic technologies.
“Europe’s strength in technology has never rested on a single city or a single country. Rather, it rests on the depth and diversity of ecosystems from which globally relevant companies develop across the continent. […] What’s particularly exciting is how Europe’s technical talent, research strength, and industrial base come 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), offering a multifaceted overview of the global innovation landscape.
This year’s index evaluates 315 tech ecosystems across 77 countries. The previous year included 288 cities, reflecting the ongoing expansion of global innovation centres. The methodology focuses on venture capital investments, company valuations, unicorns, ecosystem dynamics, and connections to universities.
