The German Startup Monitor 2026 shows a resilient startup ecosystem despite a difficult economic climate. The study by the German Startups Association is based on data from 1,803 startups. Its findings cover Germany as a whole, but several trends are particularly visible in Berlin. The EY Startup Barometer provides additional figures on Berlin's venture capital activity in the first half of 2026.

AI continues to gain importance

53.3 percent of German startups now place AI at the core of their products, up from 45.1 percent a year earlier. In Berlin, companies such as n8n, Parloa and Choco are helping drive this development. Following a strategic investment by SAP in May 2026, n8n was valued at approximately US$5.2 billion. Meanwhile, B2B business accounts for a record 76.5 percent of startup revenue across Germany.

Berlin leads Germany in startup funding

According to the German Startup Monitor, venture capital investment in German startups reached €8.0 billion by the end of September, exceeding the total for all of 2025. Berlin startups raised approximately €1.69 billion in the first half of 2026, up ten percent year-on-year, according to EY. This placed the capital first nationwide in funding volume, ahead of Baden-Württemberg with nearly €1.6 billion.

Berlin also recorded the highest number of funding rounds of any German federal state, with 95 deals. Four of the ten largest rounds in the first half of the year went to Berlin-based companies: STARK (€500 million), Parloa (€299 million), Taktile (€94 million) and Flink (€86 million). Together, they accounted for 58 percent of the capital invested in Berlin startups.

At the same time, EY's analysis shows that investment is increasingly concentrated in larger funding rounds. The number of deals in Berlin was 30 percent below the previous year's level, while deals declined by eleven percent nationwide. Nevertheless, Berlin maintained its leading position in both deal count and investment volume.

Unicorns, deep tech and defense

Germany counted 39 unicorns in mid-September 2026, a new record, with ten companies joining the group this year alone. Berlin-based companies valued at more than a billion include Trade Republic, N26, n8n, Enpal, GetYourGuide, Choco and Raisin.

Recent funding rounds further illustrate the city's startup momentum. Berlin-based defense technology company STARK reached a valuation of approximately €3.5 billion following a €500 million funding round in June. Fintech company Moss achieved a valuation of €1 billion in August.

The broader trend points toward increasingly capital-intensive technologies. Across Germany, deep tech investment rose from €2.9 billion to €6.4 billion, while investment in defense technology increased from €1.1 billion to €3.0 billion. Berlin-based companies such as STARK are part of this development.

Collaboration, digital sovereignty and talent

The German Startup Monitor also highlights factors shaping the next stage of startup development. Despite record B2B revenue shares, 54.1 percent of German startups cooperate with established companies, compared with 61.9 percent in 2024. Yet 74.2 percent of those engaged in such partnerships report a positive return on investment. This points to further opportunities for collaboration between startups and established businesses.

Digital sovereignty is another increasingly important topic. Some 64.2 percent of German startups rely mainly or entirely on US providers for their technology stack. At the same time, 59 percent are actively seeking European alternatives. Among those looking to switch, 63 percent identify more limited functionality as an obstacle. This also creates market opportunities for European technology providers.

Access to capital remains important for international growth. Among German startups considering an initial public offering, 61.9 percent would prefer a US stock exchange, compared with 27 percent choosing Germany.

Meanwhile, the talent situation has improved. Only 14.9 percent of surveyed startups now consider the shortage of skilled workers a major or very major problem, down from 30 percent in 2024. At the same time, 83 percent plan to hire new employees over the next twelve months.

What this means for Berlin

The figures underline Berlin's position as an important startup and AI hub in Germany. The city benefits from a diverse startup landscape, internationally successful technology companies and a strong network of research institutions, businesses and investors.

Further opportunities lie in strengthening these connections: through collaboration between startups and established companies, turning scientific research into market-ready applications, and improving access to funding across different growth stages.

This is also where ai.berlin contributes. The platform connects startups, research, business and policymakers while highlighting the companies and technologies shaping Berlin's AI ecosystem.

For more on the importance of these networks for early-stage technology companies, read our interview with Sinan Arslan, Managing Director of SIBB.

Sources: German Startup Monitor 2026 (German Startups Association), EY Startup Barometer H1 2026, Berliner Wirtschaft (October 5, 2026).