KfW Research - Dossier
Financing with venture capital creates a key requirement for start-ups to be able to open up markets and generate growth with new technologies and innovative business models. The venture capital market therefore plays an important role in the competitiveness of the economy. The German venture capital ecosystem has continued to mature in recent years but there is still a need to catch up in an international comparison. KfW Research analyses the German venture capital ecosystem and, in addition to topic-related publications, offers a quarterly barometer on business sentiment among German investors and a dashboard on the development of the German venture capital market.
VC business sentiment fell again slightly in the final quarter of 2023. The mood in the German venture capital market thus remained subdued at the end of 2023, although it was better than after the slump experienced up to the end of 2022 as a result of the interest rate turnaround. The sentiment indicator of the early-stage segment fell by 8.1 points to -27.4 balance points. Expectations remain clearly more positive than situation assessments.
Business sentiment rose again slightly in the German private equity market. The sentiment indicator gained 8.9 points to -17.3 balance points in the fourth quarter of 2023. Investor sentiment thus remained subdued at the end of the year. However, situation assessments and expectations both improved. In all, business expectations for the start to the new year are more positive than assessments of the current situation.
Although the mood in the German venture capital market cooled off again in the final quarter of 2023, start-ups in Germany were still able to attract EUR 1.5 billion in 204 financing rounds. Deal volume in Q4 thus remained on the EUR 1.5 billion level of Q3, but the number of deals fell again sharply by almost one fifth. In a long-term comparison, total deal volume in 2023 was therefore quite strong at EUR 7.2 billion.
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