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Berlin Reasserts Startup Founding Dominance Despite Funding Shortfall

Berlin’s Senate plans to focus on fintech, AI, health, sustainability, gaming to narrow Bavaria’s €600 million venture capital lead

Overview

  • Berlin recorded 481 new digital‐economy startups last year, more than double Munich’s total and twenty-times Heidelberg’s.
  • The city led all German states with 132 investment rounds, while Bavarian firms attracted €2.1 billion in H1 venture capital compared to Berlin’s €1.5 billion.
  • Bavaria’s funding edge is driven by a surge in defense-technology startups that merge AI development with traditional arms production.
  • Berlin startups secured 57 percent of Germany’s fintech venture capital, raising about €257 million in the first half of 2025.
  • The upcoming Bayer-Charité Campus in Berlin-Wedding will host a Translational Center for gene and cell therapies to boost the city’s bio-health ecosystem.