The Berlin hype seems to be over. More and more startups are relocating to other German regions. As Johannes Velling of MWIKE NRW reported, the number of startups based in Berlin is currently stagnating at around 600, which corresponds to the 2019 level. Since then, the number of startups in North Rhine-Westphalia and Bavaria has each increased by half. “However, there are still more funding rounds in Berlin than elsewhere in Germany,” said Velling. The reasons for this are purely speculative. It may be because startups in Berlin are more mature than those in other regions.

Where a startup is located plays a crucial role, especially for recruitment. “The headquarters is relevant for finding the right employees,” explained Jan Sessenhausen of Cusp Capital. But the location also plays a role in the size of financing rounds. In this respect, London has a clear advantage in Europe, especially for later-stage rounds (over €100 million). Growth investors from the US, particularly those focused on mega-assets (e.g., in the healthcare sector), are active there, while Germany generally experiences a shortage of later-stage capital. For early-stage investors, the location is less relevant.

Looking at technological trends, the experts saw considerable potential in the defense sector. Philipp Werner of Project A Ventures expects significant M&A activity and IPOs in this area over the next few years. “The massive government budgets in this sector also support this,” Werner emphasized. At the same time, the success of these investments will depend on military expertise and knowledge of the processes within the military procurement market, added Johannes Velling.