German start-ups see 6% rise in venture capital in first quarter

German start-ups saw a year-on-year 6% increase in venture capital in the first quarter despite persisting uncertainty due to the war in Iran weighing on economic expectations, according to figures released by the KfW development bank on Monday.

Start-up businesses received a total of €1.7 billion ($1.9 billion) from investors including funds and corporations between January and March, the bank said in a statement.

Investment volume was not driven "by individual mega-deals" but by "stable growth" across the market, the bank said.

International investors, particularly from the United States, played a key role in the development, with more than 75% of the funds coming from abroad, compared to more than 65% in the previous two quarters.

"The consistently high level of interest from abroad in German start-ups cannot be taken for granted given the ongoing trade and geopolitical risks," said KfW chief economist Dirk Schumacher, adding that the trend reflects persistent confidence of international investors in German tech and start-up businesses.

The health sector ranked highest in terms of new venture capital deals with 18%, followed by fintech start-ups with some 15%. Firms selling artificial intelligence tools also did particularly well, raising a total of €967 million in the first quarter.

Total market volume share of AI start-ups reached 58% in the quarter, up from the 2025 average of 43%.

In the US, four leading AI companies raised a total of $188 billion, according to KfW figures.

The German start-up sector has grown significantly in recent years. However, German start-ups are usually reliant on US investors when it comes to large sums of venture capital, and up-and-coming companies are often drawn to US stock exchanges.

According to earlier figures from the German start-up association, the equivalent of €90 per inhabitant is invested in venture capital in Germany, compared to €510 in the US.