Germany creates startups but lacks late-stage capital

Fabian Theis, of Helmholtz Munich, assessed the German startup ecosystem, noting that while the country is competitive in startup creation, it trails the United States in scaling companies. Theis identified Munich as a hub for the highest number of startups, particularly in deep tech sectors like bio and defense. However, he observed that while early-stage venture capital and non-dilutive funding are available in Europe, large-scale risk capital for Series A and B rounds is scarce. This gap often forces German companies to seek funding in the US to support their growth. Theis highlighted bureaucratic hurdles and the impact of regulations such as the EU AI Act as additional friction points. He contrasted Germany’s data infrastructure with systems in Finland and Denmark, which feature better-connected medical records. Theis pointed to the European Health Data Space as a positive development, aiming to enable cross-border health record combinations within two years. Helmholtz Munich is actively encouraging spin-offs, with group leaders expected to create at least one in the next three years. Theis concluded that while Germany excels at creating startups, the lack of late-stage venture capital and bureaucratic friction hinders scaling, though regulatory frameworks may eventually improve data access for deep tech.