Good morning there,

Well, we've made it to the end of a whirlwind year for Europe's startup ecosystem — and for me, personally. I've been at Sifted for close to two months now, and I've already learned so much from you all and your feedback.

My New Year's resolution is to make this newsletter even bigger and better next year, and I can't wait to get to it (after a nice week off sipping glühwein and relaxing with friends, of course). Send me a note with your resolutions — the types of companies you want to invest more in, one thing you'd like to implement or change in your business or something personal — and what you want to see from this newsletter in 2024. I'm all ears.

Elsewhere, scroll for a retrospective on German tech in 2023, the fastest-growing startups of this year and the most active CVCs from the past 12 months.

P.S. This is our last dispatch of 2023 — and we'll be back in your inbox bright and early on January 2.

—Anne Sraders, senior reporter

How VCs spent $70.1bn on climate tech

In 2022, VCs spent $70.1bn on climate tech globally, nearly double the record in 2021. Find out who the winners and the underdogs are in our report, along with what this meant for climate tech in 2023.  

What's the antidote for "the sick man of Europe"? 

Germany’s economic malaise was the talk of the town in the final quarter of this year, after The Economist labelled the country as “the sick man of Europe” (for the second time). Germany’s economy has taken a beating in the last 12 months; it’s the only advanced economy forecast to have negative GDP growth for 2023, according to the International Monetary Fund’s forecast in October. 

The ailment extended across the country’s tech scene this year. Last month’s budget crisis saw €12bn cut from the country's climate and transformation fund for 2024, which funnels money into deeptech and climate startups, among other projects. On top of that, overall VC funding is down a third according to Dealroom data, dropping to $8.3bn as of December 21 2023, down from just over $12bn across 2022.

As we move into 2024, an entrepreneurial reboot is needed if Germany is to survive the downturn and stay relevant on the world stage, Verena Pausder, the new chairperson of the German Startup Association, recently told Sifted. “If you're facing difficult times, then entrepreneurs are exactly the people you need,” she said. “Starting new companies and directing more capital to businesses who have already proven successful is exactly what we should be doing.”

There are signs that the German government is heeding her advice, with several new funds unveiled this year, including a €1bn fund for climate and deeptech startups and a €1bn fund of funds to invest in German and European VC. There were also major reforms to the country's employee stock ownership programmes, which the ecosystem largely welcomed, and moves to ease migration for tech workers (though there are still many issues to iron out.) 

2023 was a big year for AI in Germany too. The country had several qualms with the EU’s AI Act and was eager to ensure young startups weren’t held back by hefty regulation. It makes sense given that the country has its own AI champion, Aleph Alpha, that it wants to prosper. The startup raised a huge $500m Series B last month, and one of its backers — the Dieter Schwarz Foundation — announced plans for a new AI innovation Park in Heilbronn in southwest Germany.

So with a handful of things seemingly moving in the right direction, will 2024 mark a new beginning for German tech? Can the country overcome its famous aversion to risk? And can it emerge as one of the key AI hubs in Europe? If you’ve got an opinion, I want to hear it. Please email me with your best predictions for 2024.

— Miriam Partington, DACH correspondent

💊 Ozempic maker is Europe’s most active corporate investor in 2023.

📈 2023’s fastest-growing startup teams across Europe.

📖 If you're looking to catch up on your reading (or, perhaps, take a break from your in-laws during the holidays), Sifted's team rounded up our favourite stories from the year. Browse at your leisure: 

• This vertical farming company raised $500m, and then it all but disappeared

• UK councils have paid Beam at least £1.1m to find jobs and housing for the homeless. Is it working?

• The rise — and fall — of Babylon

• The ‘crazy’ £20bn subsea cable to bring Moroccan solar power to the UK

• Toxic bosses and unhealthy cultures: Why Europe’s VCs are tired and burnt out

• The Sifted Podcast — Ukraine special: Founders on the front line

• This AI girlfriend startup is making $100k a month fulfilling people’s fetishes

• Are Oura rings and executive coaches the answer to founder burnout?

Copenhagen-based Podimo, a podcast and audiobook subscription service, raised €44m in funding from investors including The Danish Export and Investment Fund, HighlandX and Augustinus Fabrikker.

Rotterdam-based SolarDuck, an offshore floating solar power operator, raised €15m in funding from investors including Katapult Ocean, Green Tower, Energy Transition Fund Rotterdam and Invest-NL.

Kaunas, Lithuania-based Sentante, which developed a system to perform fully robotic endovascular operations remotely, raised €6m in seed funding. Practica Capital led the round and was joined by EIC Fund.

Paris-based Kosmik, a visual work collaboration platform, raised $3.7m in funding. Creandum led the round and was joined by investors including Alven, Kima Ventures and Betaworks.

Rijswijk, Netherlands-based Helin, which offers a cloud-based monitoring and analytics platform to help maritime and energy companies more safely and efficiently manage their operations, raised €3m in seed funding. FORWARD.one led the round.

Berlin-based Ultihash, which aims to make data storage more efficient and sustainable, raised $2.5m in pre-seed funding. Inventure led the round and was joined by investors including PreSeed Ventures, Tiny VC, Futuristic VC and The Nordic Web.

Dublin-based Kerno, which provides troubleshooting technology for developers and operations teams, raised €1.7m in pre-seed funding. Elkstone Ventures led the round and was joined by investors including MMC Ventures.

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