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