Global law firm Freshfields has examined the development of acquisitions involving startups, and AI startups in particular, in Germany and Europe. The evaluation is based on figures from the financial data provider Pitchbook.

“The figures show that even in a volatile market environment, the tech sector and growth companies in particular continue to exhibit a high level of transaction activity,” says Laura Frühauf, Counsel for Tech M&A at Freshfields. She expects this trend to continue into the new year. “One driver of this development are US companies and investors who are actively strengthening their position in the European market. At the same time, industrial companies are pursuing acquisitions to accelerate their strategic capabilities, particularly in the field of AI. We are also increasingly seeing growth companies on the buy-side as they seek to achieve rapid, inorganic growth or consolidation in their market through acquisitions.”

Key findings:

• Across Europe, transaction volume in the growth company segment more than doubled in 2025: purchase prices of $47bn were reported for startups in 2024, compared to more than $102bn in 2025. In particular, the purchase prices for AI startups in Europe increased from $6bn to $15bn (where disclosed).
  
  
• In terms of the number of deals, Germany is among the top three target countries for startup transactions in Europe alongside the UK and France – this is also true specifically for AI transactions.

• The transaction values show a sharp upward trend for transactions involving growth companies also in Germany. While $3.8bn was invested in 2022, the figure rose to $11.2bn in 2025. AI investments in Germany rose from $300m to $1.6bn during this period, while for a large number of deals transaction values are not even disclosed.
  
  
• The number of reported transactions involving growth companies in Germany rose to 423 in 2025 (from 261 in 2022).

“This development also shows consistently strong interest in German and European technology companies, and that they are once again able to achieve high valuations,” explains Dr. Lars Meyer, Global Co-Head of Tech, Media and Telecoms at Freshfields. "This is consistent with what we are seeing in our practice: there continues to be considerable investor and buyer interest in AI, but also in other areas such as defense tech, fintech, enterprise software and digital infrastructure. Successful exits, in turn, are an important signal to founders and investors that it is worthwhile to build and invest in companies in Europe."

Looking ahead to 2026, Freshfields M&A Partner Dr. Philipp Pütz adds: “We are optimistic that M&A activity in the tech sector, as in other industries, will remain high in the new year. It remains to be seen whether geopolitical volatility or policy decisions in the major economies will create new challenges and thus cause caution in the transaction market.”

IPOs also a valid strategic exit option

An exit through a sale is not the only option available to founders. “The IPO market is picking up again,” explains Daniel von Bülow, partner for capital markets law at Freshfields. "Companies and owners are considering IPOs as a strategic option – and not just as an alternative to an M&A sale. A look at IPOs and listings in 2025 is encouraging. However, the market remains demanding: investors place particular emphasis on profitability, robust business models, and convincing growth strategies. It also remains to be seen whether the discussions around an AI bubble will have a short-term impact."

For young companies, an IPO can be challenging if they are unable to demonstrate a clear path to profitability. "These companies should continue to focus on private investor rounds to accelerate their growth. Once that has been achieved, the path to the stock market is essentially open. Some growth companies are therefore already consciously preparing for an IPO over the long term. This option also applies to AI companies with strong fundamentals, as quality can prevail over short-term hype.

The increasing number of delistings does not mean that IPOs have lost their relevance. “On the contrary: companies that decide to enter the capital market today are taking this step even more carefully. The quality of IPO candidates is increasing – and that is precisely what should strengthen confidence in the markets.”

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Methodology: The figures refer to transactions with target companies that were founded no more than 10 years ago. The ownership structure is irrelevant. All types of M&A transactions are included. Venture capital financing rounds are not included in this evaluation. The focus is on Corp/Strategic M&A and Private Equity Buyout deals incl. add-ons – provided the transactions have been published and completed. Source/status: Pitchbook/5 January 2026