Selling a Business in Berlin
Berlin is Germany's startup capital and one of Europe's most internationally connected M&A markets for technology and growth businesses. The city's deep pool of founder-led companies, international investor base, and growing profile as a European tech hub create an M&A environment unlike any other German city.
The Berlin mid-market M&A landscape in 2026
Berlin's M&A market is fundamentally different from the rest of Germany. Where Munich and Frankfurt M&A is driven by long-established Mittelstand businesses with decades of operating history, Berlin's deal flow is characterised by founder-led businesses typically 5-15 years old, often VC-backed or bootstrapped to profitability, and skewed towards technology, e-commerce, and digital services. This means the buyer universe and valuation frameworks are more international — more aligned with US and European growth equity norms than with traditional German Mittelstand multiples.
The legacy of Rocket Internet — which built and spun out dozens of technology companies from Berlin in the 2010s — has left the city with a mature ecosystem of operators, investors, and M&A advisers who have navigated multiple transaction cycles. Zalando, HelloFresh, Delivery Hero, and N26 have created a generation of founders and operators who understand what a competitive M&A process looks like and what buyers expect.
Berlin's M&A market in 2025-2026 is characterised by a post-VC-correction adjustment: businesses that raised at elevated valuations in 2021-2022 are now transacting at more grounded multiples, while bootstrapped businesses with strong unit economics are finding that strategic buyers — many of them US-based — are actively seeking Berlin tech assets. The international buyer interest in Berlin is genuine and structural, driven by the city's engineering talent, its multilingual workforce, and its position as a gateway to the wider European digital economy.
Key sectors driving Berlin M&A
Berlin's economy is concentrated in technology, e-commerce, media, and increasingly in cleantech and digital health. Each sector has a distinct buyer profile and M&A dynamic. Here is what buyer appetite looks like across each.
Technology & Software
Berlin is Germany's undisputed technology capital and one of Europe's most active tech M&A markets. The city's startup ecosystem — built on the legacy of Rocket Internet's company-building model and the success stories of Zalando, HelloFresh, Delivery Hero, and N26 — has produced a generation of founder-led technology businesses that are now natural M&A targets. SaaS businesses with recurring revenue, marketplace platforms, and vertical software solutions attract strong interest from both US strategic acquirers and European growth equity funds. Berlin tech businesses are frequently the first European acquisition for US software groups seeking continental European entry.
E-Commerce & D2C Brands
Berlin's e-commerce ecosystem is one of Europe's most mature, anchored by Zalando and a wider community of D2C brands, e-commerce infrastructure providers, and fulfilment technology businesses. M&A in this sector is driven by aggregators rolling up profitable Amazon and DTC brands, strategic acquirers expanding product ranges, and PE funds targeting e-commerce enablement infrastructure. Businesses with proprietary brand equity, differentiated product, and multi-channel distribution command the strongest multiples; pure marketplace resellers are less sought after.
Creative Industries & Media
Berlin has a strong creative economy — music, gaming, digital media, advertising technology, and film production all have meaningful presence in the city. M&A in these sectors tends to involve earnout structures and talent retention mechanisms as primary buyer concerns. Gaming studios and adtech businesses have attracted the most systematic international buyer interest; independent creative agencies are more typically acquired by holding company groups such as WPP, Publicis, or their PE-backed challengers.
Future Mobility & CleanTech
Berlin has emerged as a significant centre for future mobility and clean technology startups, covering EV infrastructure, battery technology, urban mobility platforms, and energy management software. The city's strong university system and access to EU climate funding have produced a cluster of early and growth-stage businesses that are attracting strategic M&A interest from automotive groups, energy companies, and infrastructure funds. Most transactions in this sector involve a growth equity component — pure traditional M&A is less common than structured investments with exit rights.
HealthTech & Digital Health
Berlin hosts a growing digital health ecosystem, including several of Germany's leading HealthTech businesses. The German DiGA (Digitale Gesundheitsanwendung) regulatory pathway — which allows digital health applications to be prescribed by physicians and reimbursed by statutory health insurance — has created a unique commercial model that is attracting international strategic interest. Buyers include pharmaceutical companies, health insurance groups, and specialist HealthTech acquirers. Due diligence in this sector requires attention to DiGA certification, data protection under GDPR, and reimbursement sustainability.
B2B Software & Enterprise Tech
Beyond the consumer-facing businesses for which Berlin is better known, the city has developed a substantial B2B software sector — HR tech, legal tech, proptech, and industry-specific enterprise software. These businesses often have more predictable revenue profiles than consumer-facing tech and attract a different, more PE-friendly buyer profile. Recurring revenue, net revenue retention above 100%, and low customer concentration are the primary value drivers. German mid-market PE funds are active buyers; US strategics acquiring European enterprise software presence are also consistent participants.
German legal and structural considerations when selling your Berlin business
Berlin tech transactions have structural features — VSOP programmes, multi-investor cap tables, notarisation requirements — that require specific expertise. These are manageable with the right process design, but they need to be understood before you start.
GmbH Structure and Growth Equity
Most Berlin tech businesses are structured as GmbH, though some — particularly those that have raised venture capital — may have converted to or been structured from the outset as a UG (Unternehmergesellschaft, a minimum-capital variant of the GmbH) or an AG. For businesses that have raised external capital, the shareholder structure may include venture funds, accelerators, and individual angel investors, each of whom must consent to a share transfer or be subject to drag-along provisions in the shareholder agreement. Understanding and navigating this shareholder complexity is a core part of M&A advisory for Berlin tech businesses.
Notarisation of Share Transfers
As in all German M&A, any transfer of GmbH shares requires notarisation by a German Notar. For Berlin tech businesses with multiple investor shareholders, this means coordinating the presence or representation of potentially many parties at a signing ceremony. Where international investors hold shares, power of attorney arrangements are commonly used. The Notar will read the entire share purchase agreement aloud, which for complex tech transactions with multiple schedules and exhibits can be a lengthy process. Palmstone plans for notarisation logistics as a standard part of process design.
VSOP and Virtual Share Programmes
Many Berlin tech businesses have issued Virtual Share Option Plans (VSOPs) or similar synthetic equity instruments to employees, rather than genuine equity. This is a deliberate structural choice made for administrative simplicity under German law, but it creates important M&A consequences: VSOP holders typically have economic entitlements triggered by a sale event, but are not shareholders and therefore do not require notarisation to transfer their entitlements. Buyers will diligence VSOP pools carefully, as they represent a cost of the transaction that must be modelled into the economics. The treatment of VSOPs — whether they are cashed out, rolled over, or converted — is a standard negotiation point in Berlin tech transactions.
Berlin Market Multiples vs. Munich
Berlin tech businesses generally trade at lower multiples than their Munich counterparts in traditional sectors, reflecting the younger average age of Berlin businesses, higher founder-dependency, and less established revenue predictability. However, for high-growth SaaS businesses with strong unit economics and international customer bases, the multiple framework is more international than German — buyers apply US or pan-European SaaS multiples rather than domestic German benchmarks. Understanding which valuation framework applies to your specific business — and ensuring the right buyers who apply the most favourable framework are in the room — is a central function of M&A advisory.
What Berlin buyers are looking for right now
Berlin's buyer market in 2026 is active and internationally oriented. US strategic acquirers, European growth equity funds, and PE-backed platform businesses are all looking at Berlin tech and digital assets. The businesses achieving the strongest outcomes share a consistent set of characteristics.
Strong unit economics and a path to profitability
The 2022-2024 correction has permanently changed what buyers pay for growth. Berlin businesses that can demonstrate contribution margin, low CAC payback, and a credible path to EBITDA profitability are attracting materially better outcomes than pure growth stories without clear unit economics.
International customer base or expansion readiness
Berlin businesses with international revenue — particularly into the US, UK, or France — are valued at a meaningful premium to domestic-only peers. For US strategic acquirers, a Berlin business with existing US revenue is proof of concept for the international scalability thesis that drives their acquisition rationale.
Clean cap table and manageable shareholder structure
Berlin businesses that have raised from many small investors, have outstanding convertible notes, or have complex VSOP structures require more transaction structuring work. Buyers price this complexity into their offers. Early-stage cap table hygiene — clearing up legacy investors, converting notes to equity, documenting VSOP terms clearly — pays dividends at exit.
Founder willingness to stay through transition
For Berlin tech businesses where the founder is central to the product vision or key customer relationships, buyers will typically require a meaningful post-close transition commitment — often 12-24 months. Founders who are genuinely prepared to invest in this transition, rather than treating it as an obligation to be minimised, consistently achieve better outcomes.
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