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DACH 2026 Outlook: AI Mega-Rounds & Defense Dual-Use · Blockchain Germany – Web3 Startups, Crypto Innovation & Venture Capital by Startuprad.io™

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Foreign.
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Your podcast and YouTube blog covering the German
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startup scene with news, interviews and
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live events.
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Hello and welcome everybody to our monthly startup News
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covering the most important developments from the innovation and tech entrepreneurship
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scenes in Germany, Austria and Switzerland collectively known as
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GSA or DACH region. You're listening to top news
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for December 2025 released today on December 18th
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together with Chris, my man. Hey, how are you doing in New York?
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Hello, welcome from Wintry New York or hello from
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Wintry New York. We had the first snow here so we are doing great.
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You had the first snow and we don't even have snow in the
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forecast and that's pretty bad. What is good? As always,
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we split the news into two parts. Today's episode highlights the
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headline worthy stories shaping the dark ecosyste them this
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month. Our deep dive into the December landscapes including
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analysis, market shift and founder level sickness will Follow
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on Monday, December 22nd. Our regular news will be published
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again for January and February on the 26th of
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February and the following days. This is a unique break
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since I am on medical leave for all of January 2026.
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So we wrap up January and February together. Chris, I can see
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there will be a marathon recording session for us or maybe two.
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Talk about Germany here. If you're doing business, it will be very hard to
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get someone on the phone or any other email replied and out of
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office email between December 22nd and January 12th.
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Prepare accordingly. We wrap up with our
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annual FinTech review on December 23rd right before the Christmas
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break. To give you all a heads up of 2026.
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Our first episode will be January 13th.
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We'll write start with a double publication
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week and we have on the 15th
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our special interview featuring Polar Steps.
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Today's episode is recorded with Chris in New York and me, Joe from
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Frankfurt. Chris, how do you celebrate Christmas in New
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York City? Because I know you're not traveling back. Are
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you there for more? You're there for more than 10 years now, so
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you're almost an adopted New Yorker. How do you celebrate
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Christmas there? I assume Rockefeller Christmas tree any. Not
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anymore. So actually this weekend I was. I took a weekend off and
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was in Montauk and yesterday there was a Christmas
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musical Christmas music concert where actually people also
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sang Silent Night, Holy Night and I couldn't help it and
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slipped into the German verses and still
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and on the 24th I have actually an
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invitation from Latin American friends of mine who also
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celebrate Christmas and then I will probably go on
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a little trip with Jewish friends of mine who
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don't celebrate who do Hanukkah and yeah, and as you can
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see like here in the back for the people watching on YouTube, there's I have
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a plant with like one Christmas ornament on it. We got this at the
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general. German general. From the German general. Consul Chris,
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I, I do have a question. So you have Hanukkah, you
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have with Latin American friends, normal Christmas.
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I'm just waiting that you have some Orthodox friends where you can celebrate Christ
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then in January and then Kwanzaa. And I have to call my
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mom in the morning, my parents and yeah, busy,
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busy, busy. For our business,
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busy business audience, you want to dive into the highlights for our
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December edition, Chris? Yes, obviously. So, yeah, let's
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talk startups. Let's get things on the road.
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We now hinted at it, it's December. That means
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everyone's in a rush and the whole year is
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in this. Like, yeah, I want to get something done and turn the
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year around frenzy. And we also see
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that in the news that we will cover today, we see
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fewer small rounds, bigger conviction checks and a lot
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more talk about infrastructure and less than,
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less of our usual, like, growth at all costs.
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We have news about AI, deep tech and defense
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also a trend that we've seen in the last couple of months here still going
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on. And we also see that people are rediscovering
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unit economics as if this is something new.
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The Dach ecosystem looks a bit calmer on the surface.
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Underneath, it's a bit more reorganizing capital,
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compute and procurement are tightening into fewer and stronger lanes.
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And yeah, so we will talk today a bit about this
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holiday slowdown and about the signals
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that are contradictory to that. And
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we also have an overview about that and all of
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these ideas on our website, startupgrade
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IO. So first topic, this is
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basically what we linked. There is basically an overview of all the
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news coverage we've done in a year and then you can just take it
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from there. Yes, first topic,
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Europe is writing, let's say frontier adjacent
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AI checks again, again at US Velocity and
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not just for apps. We see that Black Forest Labs out of Fryberg locked
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a $300 million Series B at a $3.25 billion
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valuation. So we also see here that our coverage of
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unicorns does not stop anymore and not stop
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always at 1 billion. So we're now talking 3 billion
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valuations. And black Forest Labs is expl.
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And Black Forest Labs is explicitly pitching visual intelligence
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across perception, generation, memory and reasoning.
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Flywheel moment, you could say for Germany. It's attracting
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talent, computing partnerships and follow on capital. And it Also makes
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AI model platform something that you
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could hear in the dark region which also probably was not the case a couple
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of months ago. So
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more about this you can also see on our website where we
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write about the Europe AI supercluster. Second big topic
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dual use is no longer a narrative. It's a
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category with late stage gravity. We see that quantum
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systems pushed past a 3 billion euro
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valuation with 180 million euro Series C
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extension and reporting is framing that as one of
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Europe's one of the largest European dual use raises of
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2025 meaning the market now prices defense grade
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aerial intelligence like a venture scale business. So I
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mean it's definitely one of the big through lines of the year to see that
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military and defense has gotten much much more traction
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a lot of it driven by the war in the Ukraine. Of course
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for founders this also does change the playbook a bit. Procurement
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alignment and real world performance are becoming defensibility
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and not enterprise sales overhead. And for invest we
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see the normalization of sovereign capability as a growth
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ceases Third team. You got a
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third sorry and you got a third theme for us.
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I got a third theme for you but Chris, I
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both of us I do believe
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they're in the process of quantum systems raising that and
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I do believe we'll hear over and over for the next year
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dual use there will be a lot Europe is rebuilding its
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venture plumbing and its compute stack at the same time
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because both are bottlenecks now Germany's
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HTTF and integrating DTCF
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is a structural move towards a seamless
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financing architecture from formation to scale up
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aimed straight at the series B cliff and capital intense
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deep tech for everybody who doesn't know them, they're two
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semi government backed entities. HTTF is
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5050 in parallel. The AI
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gigafactory Talk Telecom plus Schwarz Schwartz Group
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is behind Lidl for example signals compute
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sovereignty is sliding from strategy decks into
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industrial projects while softbank circling switch
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shows the global infrastructure race is getting
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enthusiastic the irony after years of software eats
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the world we are back to power permitting and data
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center deciding who gets to ship meet
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Europe's most important seed investor is linked to
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HTTF net net. The dark market
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is concentrating around winners scaled AI platforms
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automation layers like N8N that turn AI into
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workflow real do use capability and energy
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compute infrastructure that makes the whole stack possible.
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In a minute we will walk through the top
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stories Black Forest Labs Quantum Systems NN
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HTTF DTCF overhaul energy capital
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formation and the computer supply land grab
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plus what it means for the startups funding in 2025
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as well. We roll into 2026. If you want the full
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back catalog context for how these themes build
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on all year, start here. There is the link to our
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startup ecosystem ultimate hub 2025 and if
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that wasn't enough, stick around. In a few days we'll drop the deep dive
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wrap up with even more startup and tech news to join
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plus the fintech news. So I think the holidays are
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safe for all our listeners. Guys
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before we dive in December just recently delivered some of the strongest
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signals we've seen all year. Mega rounds and AI 3
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billion plus dual use valuations and
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governments finally fixing the venture plumbing. If you care about the
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dach, startups are actually heading in 2026. Stay with us.
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We're just getting started and we will be back after a short ad break.
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Chris, you want to take over Black Forest Labs? Yeah,
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let's fully go now. So I was already hinting it at
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the beginning of the show. We see that Black Forest Forest
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Labs has a Series B funding in Germany
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which is just setting the benchmark for European frontier adjacent
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AI. The Freiburg based company behind Flux,
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announced a 300 million dollar series B
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that means a 3.2 billion 5 billion dollar post
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money valuation. The round positions Black Forest Labs alongside the
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small set of European AI scale stories that can
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finance model research and development, data pipelines and
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deployment at U S style philosophy while competing in
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the generative image and visual intelligence stack.
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Investors cited a path towards systems that unify
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perception generation, memory and reasoning language that maps
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cleanly to the current multimodal agent race.
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For DA founders and VCs, this funding is the clearest
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signal so far that Germany is not only shipping applied AI but also
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attracting late stage checks for core model platforms,
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hoping that it's becomes an
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ecosystem flywheel moment that will pull talent, compute
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partnerships and follow on capital to the D region.
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Lot of background there in our show. Notes.
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Quantum Systems Series C extension
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financing pushed Europe's dual use momentum into clear
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late stage territory. The German aerial data intelligence and
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UAV company raised 180 million euros in a Series
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C extension that was announced late November
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2025, lifting their valuation above 3 billion dollar
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3 billion and taking total 2025 funding
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cited by coverage to 340 million
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euros. Story here though isn't just simply about capital, it's
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also about normalization of defense grade drone and ISR capability
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as a venture scale category in Europe.
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Balderton is named as a lead in reporting and the company
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framing expansion across multi domain unmanned
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systems in Dum's Quantum system sits at the
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intersection of defense procurement, reality, sovereign
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capability and AI enabled sensing.
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So also here you already said it. For founders and
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investors, this is a signal that dual use has matured in the
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region. Yes, magic word, dual use. Keep that in
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mind. I'm sure we will hear it over the next few years quite frequently.
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N8N Series C funding is a rare combination of
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scale and strategic intent in European software.
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It's a company that sits in Berlin and works on
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workflow Automation. They announced $80 million
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Series C bringing total funding to
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$240 million and the valuation to $2.5 billion
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with Excel Accel cited as lead and
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Nvidia's N Ventures referenced among corporate
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participants. Beyond financing, we see here that the CEO
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had a preference for European listing, which
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also comes across as a noteworthy posture shift in a market that often
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defaults to US Paths. And in category terms,
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we see and benefits from the enterprise automation wave
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and the push to operationalize AI through orchestration connectors
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and local workflow design. This is a
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space that becomes more and more crowded and
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yeah, where we see that distribution and
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developer love is deciding about who wins and who loses.
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So from my side these are the two three big stories, but
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I want to see you now stumble through some more abbreviations.
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Yes and
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dtcf. So basically the story is the
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Germany's semi semi
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government PPP VC funds,
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High tech and Deep tech and Climate Fund announced
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plans to push strength into joint public private investment
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platform. They explicitly aim for
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seamless financing architecture from formation to scale up. They
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announced it in late November 2025. Coverage frames
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this as a strategic consolidation of equity access for key
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technologies. Again AI, semiconductors, energy,
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biotech, industrial transformation, reducing the
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notorious Series B cliff basically meaning if you have to
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raise serious B, you fall off a cliff here in Germany.
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For capital intense startups, this matters because it changes
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outcomes. Fewer forced early exit, more
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continuity between early state selection and growth of state support
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and a clearer national venture stack aligned with the Future Fund
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agenda. Future Fund, by the way, is the federal
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government entity. For founders and
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VCs in DACH, the signal is more coherent capital
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pathway and for international investors it's a sign Germany is
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organizing itself to keep deep tech winners scaling
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locally. Let's dive a little
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bit. We're basically mixing up two news here, energy and climate
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Emerald Horizon 790
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million plus valuation and Future Energy Ventures
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235 million fund market design
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tailwinds Emerald
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Horizon SMR financing discussion at
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790 million valuation confirmed by reporting and
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Future Energy Ventures closing a 235 million fund
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two together mark a serious month for European
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energy tech capital formation. The Emerald
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Horizon story positioning Austria's Graz as
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an unlikely but real node in the small modular
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reactor SMR narrative while
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FEVS 235 million close
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reports reported with the 205 million
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main fund plus 30 million Italian science fund signals
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expanding institutional appetite for digital energy transition,
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grid optimization and climate infrastructure software
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at the parallel regulatory tailwinds highlighted in our
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data set around electricity market design and the macro picture
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becomes coherent energies shifting from climate change
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vision to infrastructure built where funding
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structures, policy and industrial demand
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converge. For daft founders implication is clear. The biggest
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opportunity sit where regulation creates forced adaption
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and where capex capital expenses realities reward
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credible engineering and long term execution.
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And then there's another mix up. We talk about
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the the bigger implications of the telecom Swartz deal
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and Softbank's In Switch, a data
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center expansion in Europe is escalating for projects to
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industry policy with our sources pointing to two
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parallel signals, one around Deutsche Telecom and Schwarz Group,
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the company behind for example Lidl
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and Kaufland here in Germany. Ambitions in large scale compute and
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separate reporting on Softbank exploring Switch as a
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potential AI data center mega deal. According to
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IT Times. Additional coverage the scale logic,
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GPU capacity, power permitting and local location
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strategy turning compute access into a
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competitive advantage that will shape where AI
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startups can train, deploy and price services. For
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the founders, this is not abstract compute concentration
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changes, partnership dynamic procurement timelines
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and unit economics of inference
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heavy products for VCs. It reframes AI
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defensibility as partly an infrastructure question
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who can secure reliable capacity at predictable
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costs? The founders who will understand this early will
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negotiate from strength. The rest will pay the scarcity
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tax later. And Chris, that's it already
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for our highlights episode. We will be back
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with the Deep Dive pretty soon and it's a We
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made it in less than 20 minutes. It's amazing. Thanks man.
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Yeah, I mean good thing is it only takes a couple of days until we're
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back in your feeds. So stay tuned everybody. Stay tuned.
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That's all folks. Find more news, streams,
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events and
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interviews@www.startuprad.com
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IO Remember, Sherry is carrying.