As Europe's security fears drive a surge in dual-use technology investment, one Berlin startup is positioning itself at the centre of the continent's most urgent industrial pivot.
Forged AI, a 34-person deep-tech company headquartered on Saarbrücker Straße in Prenzlauer Berg, closed a €28 million Series A round on June 30—making it one of the largest early-stage raises in Berlin's hardware and defence-adjacent sector so far in 2026. The company builds autonomous sensor-fusion systems designed for critical infrastructure monitoring, with applications ranging from power grids to railway signalling. Its founder and CEO, Marta Kowalczyk, started the company in 2023 after spending six years at Siemens Energy's Berlin-Schöneweide engineering division.
The timing is not accidental. Across Europe, the deteriorating security environment—with Russian gas queues stretching around city blocks and Poland's government openly warning of a difficult autumn—has pushed governments and institutional investors to accelerate spending on resilient infrastructure technology. Germany's federal government earmarked €4.2 billion for critical infrastructure protection in its revised 2026 budget, passed by the Bundestag in March. That money is beginning to filter into procurement pipelines, and founders who built quietly through 2024 and 2025 are now collecting the dividends.
Forged AI operates out of a converted print works three blocks north of Alexanderplatz, sharing the building with two other hardware startups and a materials science spinout from the Technical University of Berlin. The company's lab occupies the entire second floor, roughly 1,400 square metres of bench space filled with sensor arrays and edge-computing rigs. Kowalczyk's team includes eight engineers poached from Bosch's Berlin office and three PhDs from TU Berlin's Institute of Computer Engineering and Microelectronics.
The €28 million round was led by Munich-based Atlantic Labs, with participation from the European Innovation Council Fund—the Brussels body that has become a significant backer of dual-use hardware across the bloc since its 2022 mandate expansion. Berlin Ventures, the early-stage fund affiliated with the Berlin Senate's economic development programme, also joined the cap table. The company previously raised €3.5 million in pre-seed funding from Project A Ventures in 2023.
Forged AI's commercial traction is modest but real. The company signed its first government contract in February 2026—a €1.1 million pilot with the German Federal Railway Authority, Deutsche Bahn Netz, to test sensor networks on a 47-kilometre stretch of track between Berlin Ostbahnhof and Frankfurt Oder. Results from that trial are expected in September. A second pilot, with an unnamed German state-owned energy operator, began in May and covers six substation sites in Brandenburg.
Berlin's startup ecosystem produced roughly €3.8 billion in total venture investment in 2025, according to data from the Bundesverband Deutsche Startups, down from the €5.1 billion peak of 2021 but stabilising after three years of correction. What has changed is the composition. Software-as-a-service deals that dominated 2019 and 2020 have given ground to hardware, climate tech, and defence-adjacent companies that can point to government revenue as anchor income. Forged AI fits that profile precisely.
The company's growth also reflects a deliberate cluster effect that Berlin's Senate Department for Economic Affairs has been cultivating since 2024 through its Deep Tech Transition Programme, which offers subsidised lab space and matchmaking with federal procurement offices. Forged AI was among the first 12 companies admitted to that programme. Its Prenzlauer Berg location puts it within walking distance of Factory Berlin on Rheinsberger Straße, where several of its engineering hires previously worked.
Kowalczyk plans to grow the team to 60 people by the end of 2026, with most new hires coming from TU Berlin and RWTH Aachen. The Series A capital will also fund the opening of a second hardware lab, likely in the Adlershof Science and Technology Park in Treptow-Köpenick, where the company has been in discussions with campus management since April. If the Deutsche Bahn pilot converts to a full contract—a decision expected in Q4—Forged AI would enter 2027 with a government revenue backlog that makes a Series B straightforward. The harder question is whether Berlin's manufacturing supply chain, still thin compared with Munich or Stuttgart, can keep pace with what the company is trying to build.
How does this story make you feel?
Spread the word
About this article
Published by The Daily Berlin
Daily brief
Free, in your inbox before 7am. Weekdays.
More in Business
