Berlin Continues to Lead as a Major Destination for VC Capital

Berlin continues to be a prominent player in the European startup ecosystem, especially in terms of attracting venture capital, despite trailing behind London in fintech investment. According to Orkhan Abdullayev, CEO and co-founder of the Berlin-based payments startup Payrails, the city remains a "major destination" for VC capital and a key hub for startup activity, particularly for engineering talent.

Although London leads the European fintech scene—having seen $2 billion invested across 184 deals in the first half of 2024—Germany ranks second with $462 million invested in 37 deals, according to data from Innovate Finance. Within Germany, Berlin outpaces other cities like Munich and Düsseldorf in terms of both capital and talent attraction. Abdullayev emphasizes that Berlin's vibrant ecosystem offers immense opportunity for startups looking to scale, noting that the city continues to be a magnet for top-tier engineering talent and venture capital.

Payrails itself has been a strong beneficiary of this ecosystem. The company, founded in 2021 by executives from Delivery Hero, has already raised over $20.8 million in funding from high-profile investors such as Andreessen Horowitz, EQT Ventures, General Catalyst, and HV Capital. With a headquarters in Berlin and a team of 70 employees, the majority based in the city and around 10 in Cairo, Payrails is growing rapidly. The startup focuses on providing a unified platform for businesses to manage payment acceptance and automate financial operations, directly competing with enterprises that build in-house solutions and payment platforms like ACI.

The company's growth is underscored by its recent partnership with global sports brand Puma, which will allow Puma customers to access a broader range of payment options and enjoy a more seamless buying experience. In addition to securing a major deal with Puma, Payrails has successfully forged partnerships with other high-profile brands, such as Just Eat Takeaway and Vinted. These strategic alliances are more than just business transactions; they represent a broader trend and highlight the significant potential for fintech startups to collaborate with influential global companies, even at an early stage of their development.

Orkhan Abdullayev, CEO and co-founder of Payrails, views these achievements as a testament to the burgeoning opportunities within Berlin’s tech scene. The success of these partnerships illustrates that Berlin’s startup ecosystem is not only robust but also capable of attracting and nurturing significant business relationships. It reflects the city’s status as a crucial hub for innovation and investment in fintech, despite its current position behind London in terms of total fintech investment.

The partnerships with Puma, Just Eat Takeaway, and Vinted also demonstrate the effectiveness and appeal of Payrails’ payment infrastructure solutions. By integrating their technology with such prominent brands, Payrails is able to enhance the payment experiences for customers, offering them a wider range of options and a more seamless buying process. This ability to engage with leading global brands serves as a powerful validation of Payrails’ value proposition and the potential for fintech startups in Berlin to drive significant industry advancements.

These developments are indicative of Berlin's growing prominence as a center for technological innovation and venture capital. The city's vibrant ecosystem continues to attract and support high-growth companies, fostering an environment where startups can thrive and make impactful strides in their respective fields.