2024: KfW Capital continued to strengthen the VC ecosystem

• Total commitments of EUR 1.6 billion, approx. EUR 426 million under own programmes
• “Green Transition Facility”: boost for climate tech, fully invested early
• More than EUR 2.5 billion already invested in 132 VC funds – reaching some 2,400 start-ups
• Growth Fund Germany: more than half the volume already committed by end of year
• 2025: Investment volume expected to remain on a high level, further development of VC ecosystem

KfW's subsidiary KfW Capital committed some EUR 1.6 billion last year (2023: around EUR 2.1 billion). The high volume of the previous year was due to special effects of the European Investment Fund (EIF) under the “German Future Fund (GFF)-EIF Growth Facility” in 2023/2024.

“In the past year, KfW Capital successfully invested the planned target volume of around EUR 425 million in 27 German and European VC funds under its own programmes. This year we will continue to be a reliable partner for the VC ecosystem and will be improving the funding conditions for start-ups and innovative tech firms. Besides our own investments, we will also be providing strong impetus by coordinating the Future Fund and providing investment advice in the context of the Growth Fund Germany,”

said Dr Jörg Goschin, Chief Executive Officer of KfW Capital.

“In the six years since we were established, we have succeeded in building up an attractive portfolio thanks to our selective and consistent investment approach. It is highly diversified in terms of sectors and vintages. We have invested in both promising first-time funds and established follow-on funds,”

said Alexander Thees, Managing Director of KfW Capital, who has been managing the 100% subsidiary of KfW in partnership with Dr Jörg Goschin since it was founded in 2018.

Through the programmes which KfW Capital is implementing with support from the ERP Special Fund and the Future Fund, around EUR 425 million (2023: EUR 471 million) were committed to 27 European VC funds to support start-ups and innovative companies in Germany. A particular highlight of these programmes was the Green Transition Facility” (GTF). KfW Capital was able to fully invest the GTF, which was launched in June 2023, already at the end of the year – after one and a half instead of the initially envisaged two years. Around EUR 100 million has been committed from KfW funds to seven climate tech funds (EUR 40 million in 2023, EUR 60 million in 2024).

A well-diversified portfolio comprising 132 VC funds

KfW Capital has already committed investments totalling around EUR 2.5 billion to 132 VC funds. The portfolio is broadly diversified, with around 45 per cent of VC funds focusing on ICT, 22 per cent on life sciences and 9 per cent on industrial tech, while 24 per cent invest across multiple sectors. More than half of the funds already invest in the technology of the future, AI. One fifth of all VC portfolio funds invest in the field of green tech.

The VC portfolio funds invest around four times the capital brought in by KfW Capital in start-ups and innovative tech companies in Germany. In total, more than 2,400 start-ups and innovative technology companies received funding from VC funds in the portfolio of KfW Capital up until 31 December 2024. All of the VC funds in which KfW Capital is invested have an ESG policy.

Eleven building blocks of the Future Fund are active

The Future Fund of the Federal Government, which KfW Capital coordinates on behalf of the Federal Republic and KfW, has already made more than EUR 13 billion available for investments in VC funds and start-ups up until 2030. Currently, a total of eleven building blocks (ten at the end of 2024) already addresses the various needs of the VC ecosystem (the GTF is already fully invested, see above), especially in growth finance. In the past year, KfW Capital made a one-off investment of EUR 500 million in the HTGF Opportunity Fund and a further EUR 430 million in the Deep Tech & Climate Fund (DTCF) in its capacity as trustee. Both are likewise building blocks of the Future Fund.

KfW Capital also acts as an investment adviser for the “Growth Fund Germany”, which has a volume of EUR 1 billion. This makes it one of the largest VC funds of funds ever launched in Europe. The support of KfW Capital as an investment adviser had made it possible to raise around 70 per cent in private capital from institutional investors and large family offices. One year after the final closing (November 2023), the Growth Fund had already committed more than half of its volume (some EUR 600 million) to 31 VC funds at the end of the year.

KfW Capital will continue to develop the VC ecosystem in 2025 as well

In addition to investing the same volume as in 2024, KfW Capital will continue to support the further material development of the VC ecosystem in 2025 as well. The successfully introduced KfW Capital VC Academy will again be held four times in 2025, addressing topics such as life sciences and impact investing. ESG training, which KfW Capital carries out jointly with VentureESG and the BMW Foundation Herbert Quandt and enjoys great popularity among VC funds, will again be part of KfW Capital's annual programme. Under the WIN Initiative (in German), targeted further training programmes in the field of venture capital for investors, known as limited partners, will also be designed for the first time. This will be done jointly with the ESMT Berlin and the Frankfurt School of Finance & Management, two renowned business schools.

Service:

You can find an overview of the commitment figures for 2024 at: KfW Promotional Figures 2024(PDF, 258 KB, accessible) (page 7)