Germany sees mixed investment trends in venture capital and foreign direct investment

Germany is experiencing divergent trends in investment. In the second quarter of 2026, German startups received approximately 3.4 billion euros in venture capital, the strongest quarter by volume since mid-2022. However, investor sentiment has declined, with the German Venture Capital Barometer business climate index falling 10.2 points to minus 35.8.

This high investment volume was driven by a concentration of capital in a few large deals, including seven transactions exceeding 100 million euros. The number of funding rounds of at least 1 million euros has decreased significantly compared to 2022, with only 86 such rounds recorded in Q2 2026. Scale-ups accounted for 72 percent of the invested capital.

Separately, foreign direct investment in Germany saw a significant increase in 2025. Foreign companies invested approximately 86 billion euros, a rise of over 50 percent compared to the previous year. While investments from the United Kingdom surged by nearly 300 percent, direct investment from the United States fell by 44 percent to nearly 12 billion euros.