Startup News April 2026 | DACH Venture Capital Is Leaving SaaS

Software ate the world. In Germany, that era is over. If your startup doesn't touch the physical world, capital has already moved on. Welcome to startuprad.io, your podcast and YouTube blog covering the German startup scene with news, interviews, and live events. This is StartupRadio. I'm Joe, joining you from Frankfurt am Main, Germany. With me today, not from New York City, is Chris Farnbach. Chris, good to have you here. Hello, I'm in my childhood home in the middle of Germany, Witzenhausen. So that means we're in the same state in Hesse. And, uh, yeah, people who are watching us on— who are actually watching us on YouTube might see some tchotchkes from my childhood behind me. Good to be here. You got a big episode ahead of us. Yes, we do. A big episode. Our newscut runs from March 23rd to April 22nd, 2026. The production date is of course also April 22nd, and the thesis for this month is simple: DACH venture capital has completed a structural rotation from software to physical infrastructure. The money is going to companies that build things governments and enterprises cannot do without. Think defense, space, sovereign technology. Not another SaaS layer, not another marketplace. Hardware with procurement contracts. Yeah, and we can also really see that the numbers are backing that up. So in Germany, for example, we see that, um, uh, companies raised $3.19 billion, so like $3.2 billion across more than 130 equity rounds through April. That's a plus from, of 15% year on year in the DACH region as a whole. So Deutschland, Austria, Switzerland, GSA as they say in English, has, uh, were, um, $4.12 billion deployed in nearly 200 rounds through March. And Switzerland is forecasted to reach, uh, 1.5 billion Swiss francs in the first half. That's also more than a third more than last year. So yeah, there seems to be like a weird kind of optimism in the market. Money is there. It is, it is. And I want to add, that's only the VC funding rounds that have been found. So guys, keep in mind there's a lot of, uh, pre-seed, seed, even Series A funding rounds that are not on those numbers yet. Also, the geography has shifted as talked about in the last episode. Munich overtook Berlin in venture capital for the first time, um, €2.7 billion versus €2.4 billion, adding up to a very significant number. Oh my God, that's not a blip. The point of this take is that it is a structural realignment driven by defense, robotics, and industrial AI, which is more prevalent in Munich than in Berlin. We have 3 predictions on record for this episode. We could be early, but the direction is pretty clear. This is number 1: defense tech and space will produce more billion euro outcomes than SaaS within 24 months. This is number 2: Munich's funding lead over Berlin is permanent. Priorities have shifted away from B2C, where Berlin is still dominant. Number 3: The Nasdaq IPO window for European climate tech is closed until at least 2028. Let us get into it. Our segment number 1: Europe's space bet. Would not have thought I would ever talk about that here, Chris. We start Artemis. I mean, space is the hardest topic at the moment. Everybody loves space. Yeah, exactly. Uh, I do, my sons do. I have to read them space stories at night. By the way, ChatGPT is very good if you tell them how old your kids are, what the topic should be, how long you want to read. It comes up and the style of a specific children's book author, and it comes up with an amazing goodnight story. Yeah, that's how they get you. That's how they get you. Anyway, we start with space because this card gave us two significant signals. First, Isar Aerospace— we talked about them quite frequently— the Munich-based launch company is in talks to raise €250 million at €2 billion valuation. That is their largest round today. They have raised over $654 million US total, including a €150 million convertible bond from Elbridge Industrials— from Elbridge Industries— last year. Yeah, and also this is something where the context really matters. Their second orbital launch attempt from Andøya Spaceport, that's in Norway, was scrubbed multiple times in late March, once because of an unauthorized boat entering the danger zone, then because of a pressure tank leak, which is something that sounds really dramatic, but it actually happens quite often, even at the NASA and SpaceX, um, uh, attempts. And, um, their first attempt in 2025 ended about 30 seconds after liftoff with the rocket falling into the sea. So yeah, We will, we will see how well they're doing. But also here, given what we've learned from space startups and space projects in the last couple of years, it's— it always— these, these steps and improvements are always really incremental from one try to the other, from one attempt to the next. For me, actually, the question is, does the next launch attempt work? If orbit is achieved, it validates decade of European commercial launch investment, if not the €250 million round, becomes a stress test of investor patience in, of course, capital-intense deep tech. Europe needs a sovereign launch capability, and ESA Aerospace is the continent's most capitalized bet. And right next to it, in Switzerland, we see our second space signal of this episode. Pave Space, P-A-V-E, that's based in Zurich. They closed a $40 million— all in capital because they are paving the way, I guess. They closed a $40 million seed round led by Visionaries Club and Creandum. They're building the Lioba, L-Y-O-B-A, heavy-lift kick stage. That's a 20-metric-ton vehicle that can deliver up to 5 metric tons of payload from low Earth orbit to geostationary or even lunar trajectories in under a day. That's what they say. They were founded in 2024 by EPFL alumni, and they plan a demo launch in October. So it's also an interesting development in that space. I think we'll be looking a lot into space in the future. Uh, we, we already may tell the audience that due to compliance of your current full-time job, they may be hearing you before the— before summer for the last time here actively with us in Startup Radio. Very unfortunate. Let's get back to our topics here. A $40 million seed is a mega round by European space standards. To Dach Space Signals, in just one news cut, the space sovereign narrative is no longer just policy documents, it's real venture capital flowing. Yeah, moving on from space to defense. Yes, the drone industrial base. Germany's defense budget hits €83 billion in 2026. This is a €20 billion year-on-year increase. It's a hell of a lot of money. Projections reach €162 billion by 2029, including off-budget funds. And the drone procurement story is just got a new chapter. So yeah, because on April 16th, a week ago, the German Parliament Bundestag Budget Committee approved a nearly €300 million initial order within a €2.4 billion framework agreement for Rheinmetall. So I mean, really like a supplier in that area that has been around for like decades, probably even centuries, to manufacture kamikaze— kamikaze— kamikaze drones. This makes Rheinmetall the third drone supplier for Germany's Lithuania Brigade alongside Helsing and Stark Defense. So I mean, and overall, just the fact that we're talking about these companies now, thinking back a couple of years, all of a sudden we talk about developments in defense tech and military so much. It's fascinating for me. I was like, yes, really, like, it's, it's fascinating sounds too excited. It's at least like a very visible an interesting shift. Yeah, yes, exactly. Let us put the total numbers together here, Chris. Helsing has a framework of almost €1.5 billion, €1.46 billion. Stark has up to €2.86 billion, also almost €2.9 billion. And now Rheinmetall has €2.4 billion. That's a lot of money for drone framework across all three suppliers, exceeding €7 €1 billion. Germany is building a really competitive multi-vendor drone industrial base, 2 startups and 1 legacy prime. That is really extraordinary here. Now they all shall be used, as I said, in Lithuania as part of strengthening NATO's eastern flank. Germany wants to send 5,000 or station 5,000 soldiers there. And the UNI wants to be operational in 2027. So next year. And all those drone systems must pass qualification testing by April 2027. So also there are a lot of things happening still under the influence, of course, of the Ukraine war and Russia's actions there, but also under the influence of the really, of the unclear future of NATO or rather America's role in NATO. So there, Germany can be seen as really stepping up. The structural point here that we're trying to make: Germany is the only European market where startups have a visible pathway from the prototype to major procurement contracts. That is why defense startup funding has hit $8.7 billion across Europe in 2025. That's 43% of all deep tech funding, and Germany is at the center of it. Chris, and now we're talking new unicorns, huh? Shouldn't we? Unicorns! Um, Dash Zero— I do believe that's how it's pronounced— $110 million Series B led by Balderton Capital, valued at $1 billion. They built what they call the autonomous nervous system for production, AI agents that do root cause analysis, remediation, deployment validation, and cost optimization. Founded only in 2023, already 600 paying customers including Zalando and Taco Bell. Headquarters are split between Solingen and New York. I, I think the, the, this is put headquarters with New York is always a pretty good idea, isn't it? Yeah, obviously, just as I do. I mean, it's interesting, they seem to have a really working use case already, and the thesis at DashO is or Dash Zero is that observability must evolve from monitoring dashboards to autonomous operations. They have a core product called Agent Zero, deploying specialized AI agents across the production stack. And if that works and if their thesis proves to be correct and the customer traction suggests it might be from what we are seeing right now, then it's a, yeah, this might be a very, like some kind like a default infrastructure layer. A German unicorn in under 3 years from founding, that is quite speed. Um, and it is an infrastructure, not consumer. The pattern continues. Policy at scale. By the way, if you haven't seen it, we just published my interview with Thomas Jarzombek, Undersecretary for Startups and Digital, uh, Long-term listeners, long-time listeners will remember him from 2021 where he was a digital commissioner heading the €10 billion Future Fund. Right now I think we're including all the segments up to €55 billion in those instruments. But let us get— sorry, I'm always taking detours here. The policy segment is unusually dense this month. The new CDU-SPD coalition has delivered the most aggressive startup policy package in German history. Admittedly that's not a high yardstick. And Chris, let me walk you through it, okay? The, the WIN Initiative, it's something we've talked about under the last Scholz government. This was delayed, this didn't get started, but it was actually under new government doubled from €12 to €25 billion, the largest public-private venture capital commitment in European history. Again, the largest private-public venture capital commitment in European history. KfW Capital launched Wachstumsfonds 2, meaning growth fund number 2, the second €1 billion fund of funds, on April 1st. No joke. The future fund was extended beyond 2030, uh, with a total €30 billion commitment. Yeah. And then there's also the institutional infrastructure. So money went to 10 startup factories. 10 startup factories were awarded involving more than 120 universities, 114 industry partners. There's plans for a 24-hour online company registration, which for German bureaucracy sounds crazy. There's a new digital ministry. Yeah, you got even more. So yeah, yeah, it's, it's, there are 3 capital mobilization tracks that are now operating simultaneously. Win2, it's the private-public partnership for institutional capital. Wachstumsfonds 2, funder funds. Basically, KfW Capital will use it to seed new VC funds. So Those VCs can have them as anchor investment, very likely, and then raise private capital. And the startup factories for deep— for the deep tech pipeline, they help students, PhD candidates, PhDs, professors to launch out of universities. And this is structural policy that is not really election cycle signaling. Yeah, so I mean, even if we sum up what we talked about for now, yeah, we have like defense procurement, we have the space thing, we have venture capital going up, uh, now here these tax incentives, infrastructure, uh, being improved. So, um, yeah, what we definitely can see, I mean, another, it's another question how internationally competitive it is, but what we can see just looking at Germany itself, this really means it feels like what is like the most comprehensive startup industrial policy in the country's history. So that's really interesting. One question is execution, what comes out of it, as it is always the case, but we can definitely say that's Things are happening. Segment number 5. You, you can totally tell we are very analytical here on our way with the space thing. Segment number 5, let's talk a little bit about fintech tokenization and the IPO reshuffle. Two fintech signals and one IPO story that ties everything kind of a little bit together for us. First, Midas in Berlin, $50 million Series A led by RRE and Creandum. You remember them from the other story, with Franklin Templeton and Coinbase Ventures on the cap table. They have powered over €1.4 billion in tokenized assets insurance and are launching a liquidity layer for instant redemption on tokenized products. Yeah, and I mean, if you look at this, Franklin Templeton and Coinbase on the same cap table, that's like a real— that tells you that real-world asset tokenization is crossing from what used to be like crypto-native experimentation to now institutional rails. And here we see— we talked so much about Munich so far, but here we see that really Berlin is becoming an infrastructure hub for this type of tokenized finance in Europe. Um, and then Bitpanda, the Austrian unicorn we talked about quite a lot. The Vienna-based platform is advancing a Frankfurt IPO at a €4 to €5 billion valuation. Goldman Sachs, Citi, and Deutsche Bank are advising. They choose Frankfurt over London explicitly, explicitly, sorry, citing weak liquidity on the London Stock Exchange, LSE. If Big Panda succeeds, it validates Frankfurt as a viable tech IPO venue. Yeah, especially since— okay, I now am like the bearer of bad news. On the other side of the Atlantic, we see 1.5, um, a company working in the climate, um, climate change space, which has shelved its NASDAQ listing. Um, it They have the seat in Hamburg. It's a Hamburg climate tech unicorn even. They have €520 million in revenue. They, but they were citing tariff turmoil. So I mean, definitely the mood in the US, at least coming from the government regarding anything climate tech, has really shifted. They may delay until after the 2028 US election. You were hinting at it in the beginning already that this might be the case for several climate companies. It's the first major German IPO casualty of transatlantic trade friction. So you have Bitpanda going to Frankfurt, 1,5 kind of running away from NASDAQ. The, the, the total IPO geography is shifting in real time as we're looking at it, Chris. Our prediction: Frankfurt becomes the default European tech listing venue within, oh, let's say 18 months. Your prediction? My prediction? Let's do a little lightning round. Planetary in Switzerland, €23 million for a full-stack fermentation startup building bioeconomy infrastructure, led by Radikal Kapital, meaning radical capital but spelled with a K in the radical, and Oetker Ventures, announced April 20th. But you know, it's either it should be radical capital or it should be radikal kapital, but they decided for radikal capital in the Rhine. Ah, these are the things. I want to be part of those meetings so I can be like the grumpy German and be like, oh, actually. So anyway, Peak Quantum in Munich, €2.2 million pre-seed for fault-resistant superconducting quantum chips. It's a spin-off of, uh, TUM, the Technical University of Munich, selected to operate the EU Chips Act Supreme Pilot Line. They have a total funding of €5 million. They announced it on April 14th, early, but Munich deep tech pipeline here keeps producing. Yes, guys, let us close here with the big picture. 3 predictions on record. 1, defense and space will outproduce SaaS in billion euro outcomes within 24 months. Yes, Chris, I know. My prediction: 2, Munich lead over— Munich's lead over Berlin is permanent. 3, the Nasdaq window is closed, Frankfurt takes over. Yeah, and so we also see here that there's a connecting thread, which is procurement. So every major signal this month has a buyer on the other side. Governments are buying drones, airlines are booking launch slots, pension funds are buying tokenized yield. And so, um, like the startups winning the cycle are the ones where someone already has, has a budget and has a budget plan. Good for them. Yeah, that is the editorial line. If your customers have— if your customer has a procurement budget and your product touches the physical world, Dachkessel markets have never been more receptive. If you're building another software layer for crowded market, the funding environment just got harder. And also what we talked about, the policy infrastructure in Germany is finally catching up. €25 billion in Win Capital, a second fund of funds, three parallel capital tracks running simultaneously. And we can really say that Germany has never deployed this much capital infrastructure for startups. Um, again, not a very high bar, but the, the numbers— $55 million is totally staggering. Let's do a little bit last word from me. The old question was, can Germany build startups? The new question is, can Germany execute on the startup. It has already built. The capital is there, the procurement is there, the policy there. Now it is about delivery. Yes, chop chop, people! Has— does have a budget line. You're not building a startup, you're building a story. Guys, thank you very much. And as we said, this the next, maybe the last startup news for Chris after 11 years. He joined me for the Startup News in May 2015. Chris, can you believe it? Yes, yes. No, it feels— doesn't feel this long. Yeah, I know. I have good friends that I know less longer. That sounded horrible, but yes. No, yeah, 11 years, that's it. Yeah. As, um, and you'll hopefully join us for the main news again. Yes, then maybe the news will only be me. We will see, guys, for a final goodbye. We will see if— as— but all of it, nothing is permanent, at least for now. Yeah, but you are not leaving Startup Radio, you're only dropping the active mic. I will be in the background. I will be in the background for like as part of the company as I was. Before, but just not hosting anymore. Guys, thank you very much. Was a pleasure. Thank you. Bye-bye. That's all, folks. Find more news, streams, events, and interviews at www.startuprad.io. Remember, sharing is caring.