Post by Samuel Schuler

I have rented plenty of cars, always for holidays, never once for a deal. A few weeks ago that changed. Years of pipeline and portfolio work across Germany, Austria, Switzerland, the UK, France, the US and China in my corporate days. The destination was always a city with a station. This time the company sat an hour past the last sensible connection. Bug or feature? In 2025, German startups raised € 8.4 billion. Bavaria and Berlin together accounted for more than 70 percent of that, Bavaria now leading at 3.3 billion. (source: EY Startup-Barometer, Jan.'26.) The rest of the country, where much of the actual engineering happens, split what was left. The dispersion is a feature. #One. The research does not sit where the money sits. Black Forest Labs, now valued at over three billion dollars, built the most widely used open-source image generation models in the world from Freiburg, not Berlin, not Munich. Black Semiconductor raised 250 million for European chip design in Aachen. Dresden anchors the largest microelectronics cluster on the continent. Karlsruhe owns cybersecurity, Jena owns optics, Erlangen owns medical technology. DeepL scaled a world-class AI translation engine out of Cologne. The founders these institutions and companies produce stay local. Partial remote work, now standard, means they recruit senior talent nationally without moving the company. #Two. Capital goes further. Lower salaries, lower rents, engineers who are not poached every eighteen months. Less burn, fewer rounds, cleaner cap tables at Series B. #Three. We invest in tech companies that sell into the Mittelstand, and the Mittelstand is regional. The first customer, the domain expert, the pilot line sit down that road, not three flights away. Munich, where all #BigTech companies now run major operations and Technical University of Munich alone has produced 21 unicorns, is the clearest proof that a German city can build a world-class ecosystem. Berlin's startup community is rallying behind BAD1 to reclaim the top spot. Whether such campaigns move the needle, others shall judge. What matters more is that strong founders are not waiting for either city to win the argument. They build where the science and the customer are. The rental car was not a nuisance. It was a moat. If your fund backs German tech beyond the obvious postcodes, I would like to compare notes.