When DeepSeek launched its large language model (LLM) that it claims cost $6m to make, it served as proof for many VCs that LLMs had truly become commoditised.
Since then, investors have turned their heads towards companies building at the application layer of AI — that is, those using AI to tackle specific use cases in a variety of industries.
“LLMs and chips are great, but as infrastructure continues to commoditise, I see AI’s application layer as the key arena for Europe to not only excel, but potentially beat other markets, thanks to our strong domain expertise and rich data sets in key, complex industries like manufacturing, healthcare, and logistics,” Nicole Büttner, founding partner at Meranix Capital tells Sifted.
This — and the rise of AI agents, tools that use AI to perform tasks without a human — are what Germany’s VCs have their eyes on when considering AI companies to back.
We asked investors from General Catalyst, Merantix Capital, Earlybird and EQT Ventures to give their top AI picks on their home turf.
Nicole Büttner, founding partner of Merantix Capital
Dunia, Berlin
Founded in 2022, Dunia is leveraging AI and a “self-driving lab” to discover new advanced materials. This has the dual benefit of not only tapping into a huge market opportunity, but also playing a critical role when it comes to sustainability and environmental benefits. The company announced a €10.6 million funding round last year, from backers including Redalpine and Kindred Capital.
Avelios Medical, Munich
Avelios, founded in 2020, is developing a system to modernise hospitals. The startup that tackles administration and billing just announced a €30 million Series A led by Sequoia Capital. Healthcare is an area which has lots to win on AI disruption, addressing the inefficiencies in healthcare systems to reduce preventable medical errors as well as the administrative burden on healthcare professionals.
Doreen Huber, partner at EQT Ventures
Company Shield, Berlin
Founded in 2023, Company Shield is tackling the “human firewall” challenge with AI-powered cybersecurity training. By creating hyper-realistic attack simulations tailored to individual employees, it makes cybersecurity training engaging and effective. As AI-based cyber attacks become more prevalent, this will only increase in relevance.
Flank, Berlin
Founded in 2018, Flank’s AI agents automate routine legal tasks — from generating documents and providing negotiation support to completing compliance forms – freeing up legal teams for higher-value work. Its current clients include DeepL, SumUp and TravelPerk,
Scripe, Berlin
Scripe is an AI-powered platform that helps users create high-quality, tailored LinkedIn posts in minutes, using text or audio inputs. The company, founded in 2023, demonstrates the potential of AI in social media by analysing viral posts to generate personalised content that boosts engagement and saves you time.
Dr. Andre Retterath, general partner at Earlybird VC
Black Forest Labs, Freiburg
Black Forest Labs is an image GenAI startup launched in 2024 whose technology is currently powering the image generating feature for Elon Musk’s chatbot Grok.
The founder team includes many of the researchers behind the original AI image generator Stable Diffusion. They combine world class research and AI engineering capabilities with best-in-class image and video models and a clear value proposition towards their customers.
Parloa, Berlin
Founded in 2018, Parloa offers flexible customer support agents that enable users to integrate and quickly replace best-of-breed tech components like voice-to-text across the stack while maintaining workflow knowledge. The company has so far raised $94.3m, and its investors include EQT Ventures, Mosaic Ventures and German business angels such as Personio cofounder Hanno Renner and two Forto cofounders Erik Muttersbach and Michael Wax.
Viet Le, partner at General Catalyst
Amie, Berlin
Founded in 2020, Amie — an app blending emails, calendars and to do-lists into one easy-to-use platform — is still an underrated play in the agentic game. The company is one to watch as it is well-positioned to capture end-to-end AI assistant flows later on.
The company has raised a total of $8.8m, according to Dealroom data, from investors such as Creandum and Spark Capital.
Read the orginal article: https://sifted.eu/articles/german-ai-startups-to-watch/
