German Startup Scene Lacks Risk Appetite, Says Carsten Maschmeyer

In 2025 Germany recorded a historic 3,568 newly founded startups, the highest figure to date. Despite this surge, domestic venture‑capital provision remained low, with only about a third of the total VC money supplied by German investors and less than a quarter in the first quarter of 2026, according to KfW data. The bulk of financing originates from abroad, chiefly the United States and the United Kingdom, and large foreign pension funds such as Ontario Teachers’ Pension Plan have invested heavily in German unicorns.

Investors Fabian Westerheide and Carsten Maschmeyer argue that the German ecosystem suffers from a cultural aversion to risk and failure. While artificial‑intelligence‑driven firms now account for roughly 27 % of new companies, early exits and foreign‑owned acquisitions dominate the exit landscape, limiting the creation of enduring domestic tech champions. Maschmeyer calls for an “experiment year” to foster a more tolerant attitude toward failure and reinvestment, hoping to stimulate home‑grown growth and retain wealth within the German economy.