KfW Research: German venture capital market was weaker in the third quarter

• Domestic start-ups raised EUR 1.3 billion – 47 per cent less than in the previous quarter
• Market remains relatively robust despite adversities
• US investors continue to have a strong interest in Germany

German start-ups raised less capital in the third quarter of 2025 than in the previous quarters: around EUR 1.3 billion in total – a drop of 47 per cent on the strong second quarter. From April to June, however, market activities were dominated by six mega rounds in which well over EUR 100 million was invested. The third quarter saw only one such mega round. The 200 transactions closed was only minimally below the level of the previous quarter.

These are the findings of the new KfW Venture Capital Dashboard, in which KfW Research publishes quarterly figures on the German venture capital market.

Provided the third quarter marks only a temporary decline, the German venture capital market is trending to close the year on a similar level as in the previous two years – roughly seven billion euros. The deal volume so far this year stands at EUR 5.3 billion (previous year: EUR 7.5 billion). There is also a chance, however, that annual transactions remain expectations if the final quarter shows similar weakness.

“The German venture capital market is showing itself to be relatively robust given the weak economic growth, international trade conflicts and intermittent disruptions in the capital markets,”

said Dr Dirk Schumacher, Chief Economist of KfW.

“Exiting from enterprises remains difficult for investors. The route of initial public offerings, for example, was blocked for vast stretches of the year because of the fragile situation in capital markets. Reviving the exit channels is increasingly becoming the key factor for the long-term growth of the venture capital market.”

In the third quarter there were 35 exits from enterprises, against a combined total of 112 for the first three quarters as a whole.

Despite political and economic adversities, US investors continue to be very active in the German market. They remain the most important foreign source of capital for German start-ups. In the third quarter they contributed 27 per cent of the funds invested.

The deal volume in the EU countries also decreased overall in the third quarter, as it did in Germany. France was an exception, with start-ups there raising USD 2.9 billion, more than in the previous quarters. The venture capital markets in the US and the United Kingdom also delivered strong quarters.

The current KfW Venture Capital Dashboard by KfW Research can be found at Venture capital market in Germany | KfW