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AI Mega-Rounds & Dual-Use Tech: DACH 2026's €3B VC Stack · Deep Tech Germany – AI, Robotics & Frontier Innovation 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.