WEBVTT

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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.