German startups raised roughly €8.4 billion in venture capital in 2025, up 19% from the previous year, according to the latest EY Startup Barometer. The annual total was the third-highest ever recorded for the German startup market, even as the number of financing rounds fell for a fourth straight year to 716.
The figures point to a market that is becoming more selective but still capable of producing large financings. EY counted 18 rounds worth more than €100 million in 2025, up from 12 a year earlier, and those mega-deals helped offset continued weakness in smaller transactions. The number of overall deals was down 5% from 2024 and far below the 2021 peak.
Geographically, Berlin remained the country’s dealmaking center by number of rounds, while Bavaria again led by capital raised. Startups in Bavaria collected €3.3 billion during the year, ahead of Berlin’s roughly €2.7 billion, with Baden-Württemberg moving into third place by funding volume.
Sector data showed software and analytics staying firmly on top, drawing nearly €2.7 billion, or about a third of all startup funding in Germany. Within that category, artificial intelligence emerged as the dominant subsegment, attracting about €1.7 billion, while energy and health also each topped the €1 billion mark.
Among the biggest transactions of the year were financings for Helsing, Green Flexibility, Tubulis, Black Forest Labs and AMBOSS, underscoring investor appetite for defense, energy transition, biotech and AI-linked businesses. The pattern suggests that investors are still willing to back scale and strategic technologies, even as the broader funding environment remains cautious.