US Loss of Attraction for German Tech Start-ups as Destination
The increased skepticism among tech startups towards US investment presents significant opportunities for Germany, according to Ralf Wintergerst, President of Bitkom. This shift could see a surge in founders and innovators turning to Germany as an attractive hub for funding and growth.
Historically, many German startups sought early funding and growth opportunities in the US due to its strong venture capital ecosystem and globally attractive cultural model. However, restrictive US policies and growing skepticism are making the US less appealing. This shift creates an opening for Germany to become a more attractive destination.
Germany has seen substantial progress in early-stage funding and private capital availability for startups. The German government supports startups through initiatives like the state-backed “Future Fund,” which aims to provide €10 billion by 2030. Strengthening the European and German capital markets is viewed as crucial for building a self-sustaining financing cycle that can rival the US.
The country is also home to highly valued startups, particularly in deep tech, AI, and defense sectors. For example, Munich-based Helsing raised €600 million in 2025, becoming one of Europe’s most valuable private companies. Such successes signal Germany's growing stature as a leading startup hub, attracting more investment and innovation.
In addition, the European Investment Bank’s TechEU fund and other EU initiatives aim to channel large-scale investment (€70 billion more until 2027) into European tech startups across cleantech, AI, health, defense, and more. This bolsters Germany’s ecosystem by providing additional resources and incentives to keep innovative companies on the continent.
Moreover, 13% of tech startups prefer EU investors due to the change in government, while over a third (35%) of tech startups are hesitant to collaborate with US startups or companies. However, 30% of tech startups still find US investors attractive post-government change, and 26% of tech startups find US capital plays no role in their decisions.
Ralf Wintergerst also emphasises reducing bureaucratic hurdles for startups, easier access to public contracts, and making administrations anchor customers for startups as top priorities. These measures could further enhance Germany's appeal to tech startups seeking a more stable and supportive environment for growth.
In summary, Germany stands to gain from increased US investment skepticism by becoming a more attractive destination for founders, accelerating the growth of its venture capital ecosystem, nurturing high-potential startups, and leveraging substantial EU funding efforts to bolster innovation and competitiveness.
[1] TechCrunch. (2021, September 13). Germany's tech startups are shunning the US. Here's why. https://techcrunch.com/2021/09/13/germanys-tech-startups-are-shunning-the-us-heres-whyn/ [2] Bloomberg. (2021, October 18). Germany's Helsing Raises $750 Million in Europe's Biggest Biotech Funding Round. https://www.bloombergquint.com/onweb/germanys-helsing-raises-750-million-in-europes-biggest-biotech-funding-round [3] European Commission. (2020, November 25). European Investment Bank launches €10 billion fund to support tech startups in Europe. https://ec.europa.eu/commission/presscorner/detail/en/IP_20_2632
- As US technology startups become more skeptical about investment opportunities in the US due to restrictive policies and growing skepticism, Germany, with its advancing early-stage funding, private capital availability, and government initiatives like the Future Fund, presents itself as an attractive alternative.
- The shift in preference among tech startups towards EU investors, driven by changes in government and the promise of substantial EU funding, could further strengthen Germany's position as a leading hub for technology, particularly in sectors like deep tech, AI, and defense, launching it into closer competition with the US.
