The sci-fi movie Hollywood would not dare to make

A Finnish sci-fi film about Nazis who have been living on the dark side of the moon since the end of the Second World War has turned out to be the unlikely hot ticket of this year's Berlin Film Festival.

Iron Sky sold out faster than movies directed by Angelina Jolie and Werner Herzog – a remarkable feat for a film that only received financing after appealing for donations on the internet, which raised $1 million of the $7.5 million budget.

Made by the first-time director Timo Vuorensola, the only cast member with any sort of name recognition is the German cult star Udo Kier, stalwart of vampire and Von Trier movies, who plays Wolfgang Kortzfleisch, the leader of the Moon Nazis. He and his fellow Nazis are discovered when the President of the United States (Stephanie Paul), a gym-loving mother modelled on Sarah Palin, is advised that sending astronauts back to the Moon will help to boost her chance of re-election.

Set in 2018 and shot in a slapdash style, Iron Sky uses the idea of Moon Nazis invading New York to create a burning satire on American politics and spin. At times, the acting and dialogue is clunky, but the special effects belie the tiny budget. This is schlock, over-the-top storytelling at its riotous and enjoyable best. Hilarious comparisons are made between the rhetoric of Nazi speeches and American presidential campaigns. As a pastiche on Nazis, it's cleverer and much more savvy than Quentin Tarantino's Inglourious Basterds.

No attempts are made to explain how the Nazis got to the Moon, nor how they survive. Much is made of how technologically inept the Nazi's mad scientist is – he's wowed by the power of Washington's smart phone – yet moments later the Nazis are flying to Earth on a fleet of heavily armed spaceships. Rather than get bogged down in laborious explanations the action is made up of a series of humorous set-pieces, with a central romance in which the perfect Aryan female (Julie Dietze) falls in love with a black astronaut.

It's the type of film that Hollywood studios would not touch with a bargepole. As such, the film-makers were forced to go underground. The internet has been buzzing about Iron Sky for months. A trailer released a few days before the premiere in Berlin received a million hits in less than 24 hours. The film-makers have cleverly made up for the small marketing campaign with a perfectly executed viral attack on social-media sites and those that have helped to fund the film have also helped promote it.

"The internet played a big role in the film-making process. The idea was to make the production process itself a part of the story and it's a big marketing aspect as well," says Vuorensola. "It was funny to be so popular. It's hard to understand how we got so big."

Using the internet for movie financing is an increasingly common phenomenon. There are a growing number of websites such as Kickstarter that aim to help film-makers find money for their films. Kickstarter works by setting a time limit and a funding goal: if the target is not reached, the money is returned to potential investors.

"You have to find a way to pitch the film in a way that is really easy to understand and easy to grasp," says Vuorensola. "The attention span on the internet is so short you have to grab them with something. Every movie has something you can grab them with and you need to unearth that. For this film, it felt so organic to use the internet community to fund and support it."

The only downside is that the sheer number of investors makes the end credits incredibly long.

'Iron Sky' is released on 4 April