KfW Research: Venture capital investors have become more optimistic

• After a setback in the previous quarter, the mood among venture capital investors in Germany has lightened up
• Business expectations in particular have improved
• Surprisingly, investment appetite has fallen

Sentiment among venture capital investors in Germany had deteriorated sharply in the second quarter of 2025. Now their mood has improved significantly again. The business sentiment indicator for the venture capital market climbed 18.5 points to -0.3 balance points in the third quarter. That puts it marginally below the long-term average represented by the zero line. This is one of the findings of the VC Barometer which KfW Research and the German Private Equity and Venture Capital Association (BVK) prepare on a quarterly basis to gauge the sentiment of venture capital investors in Germany.

“The Trumpian tariff policies led to a phase of uncertainty, but that appears to be over now. In the third quarter, business sentiment among venture capital investors made up for the downturn in sentiment seen in the early summer,”

said Dr Dirk Schumacher, Chief Economist of KfW.

Investors rated the current situation in the VC market significantly more positively than in the previous quarter. However, their assessment was still negative, at -11.9 points. Their six-month business expectations developed more positively. The last time they were this optimistic was in the fourth quarter of 2021, with the indicator surging 25.9 points to +11.3 balance points.

“The significantly more optimistic business expectations give reason to hope for strong investment at the end of the year and continued improvement in sentiment,”

said Ulrike Hinrichs, Managing Director of the German Private Equity and Venture Capital Association (BVK).

What is surprising and not so good news for start-ups in search of capital, however, is that the investment appetite of VC investors fell sharply in the third quarter. This may be because entry prices for new commitments have risen, in other words, start-ups have been receiving higher valuations. VC investors continue to regard the quality and innovativeness of start-ups seeking capital in Germany as high.

^{Note: KfW produces the quarterly German Venture Capital Barometer in cooperation with the German Private Equity and Venture Capital Association (BVK) for the Handelsblatt business daily. For detailed analyses with data tables and graphs on the development of business sentiment in the venture capital and private-equity segments, go to German Private Equity Barometer / German Venture Capital Barometer | KfW.}