The defense industry, artificial intelligence, and biotechnology are the primary beneficiaries of this trend. In contrast, Berlin—which specializes in e-commerce—is losing ground. In 2025, approximately 3.4 billion euros were invested in Bavaria.
The rising importance of the defense sector, the advancement of artificial intelligence, the green energy transition, and the reorganization of Germany’s energy supply are “megatrends” from which Bavaria is currently benefiting most. According to auditors and consultants at EY, the Bavarian startup ecosystem possesses significant strengths specifically within the technology sector. This is the reason why Bavarian projects are now attracting more capital than those in Berlin.
Young Companies Supported by an Efficient Industry
Technology enterprises are at the center of investor attention. In Bavaria, the synergy within the ecosystem is particularly effective, as young firms interact with a highly productive industrial base. In this region, that primarily includes the automotive, mechanical engineering, and medical technology sectors.
Furthermore, universities and research centers actively facilitate innovation. The success of Munich in developing and supporting its startup environment was confirmed by the firm Green Flexibility. Representatives of the Kempten-based company mentioned in an interview with BR24 that the state capital offers “ideal framework conditions,” largely due to the proximity to major universities. According to the EY study, investors in Berlin showed greater restraint last year, partly because the specialization of young companies there is focused on e-commerce—an industry currently experiencing a downturn.
Hundreds of Millions Flow into New Projects
In the Free State, the Munich-based company Helsing—which produces AI-based combat drones—benefited the most. With a funding volume of 600 million euros, the company took first place in the national rankings last year, securing 150 million euros more in fresh capital than the previous year.
The energy company Green Flexibility from Kempten also enjoys high investor confidence, having attracted a total of 400 million euros in funding last year. The firm operates in the rapidly growing market for large-scale battery energy storage systems.
Third place among the largest investments went to the biotechnology company Tubulis, with 344 million euros. Tubulis specializes in developing innovative active substances for tumor treatment. On a national scale, Bavarian enterprises are leading the way with their fundraising successes.
Federal Association Sees Potential for All of Germany
The German Startups Association (Bundesverband Deutsche Start-ups e.V.) drew a clear conclusion regarding Bavaria’s success. The organization noted that it is beneficial for the German economy as a whole “that startups in Bavaria are increasingly gaining momentum.” This success was not a coincidence but the result of a close “interconnection between cutting-edge research, industry, and capital.”
The association expressed hope that this positive development in Bavaria would spread throughout Germany: “This requires, above all, more venture capital.” However, competition between federal states for available funds is not necessarily the ultimate solution for growth: “If growth capital is available, more companies can make the leap into the top tier—regardless of their location.”
Source: BR24
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