2025: VC investments remained strong in a demanding market environment

• Business sector KfW Capital committed EUR 748 million
• Around EUR 2.9 billion invested in 153 VC funds – reaching some 2,900 start-ups
• Growth Fund Germany: EUR 1 billion fund volume almost fully invested
• Outlook: VC pillar of Germany Fund set to further strengthen the market

In 2025 KfW Capital made investment commitments to fund start-ups and young technology firms in the amount of EUR 748 million. It participated in 21 European venture capital (VC) funds under its own programmes with a total of EUR 383 million, after participating in 21 funds with EUR 381 million in 2024. The VC funds, for their part, are required to at least match the capital provided by KfW Capital in their funding of start-ups in Germany. In addition, KfW Capital already entered into a participation in the new co-investment programme “Scale-up Direct” under the Germany Fund, which was presented in December. It invested a further EUR 363 million under the Future Fund in a fiduciary capacity for the Federal Government. The volume invested by KfW Capital last year thus surpassed that of the previous year. In 2024 it amounted to EUR 659.4 million without special effects of EUR 930 million under the Future Fund (for 2025: EUR 748 million).

“In a demanding market environment, KfW Capital was able to implement its own investment programme again as planned last year and continued to be a reliable partner to the VC market. The quality of the European VC funds with a focus on Germany remains very high. Last year we recorded a 12 per cent rise in disbursements from our portfolio, which reflects the welcome increase in the VC funds’ investment activity,”

said Dr Jörg Goschin, CEO of KfW Capital. “The VC pillar of the Germany Fund, which we coordinate and implement on behalf of the Federal Government and KfW, will continue to substantially strengthen the sector in the coming years.” To this end, KfW Capital is implementing programmes with a total volume of EUR 3.3 billion in a first phase (up to 2030), among other things via direct co-investments in strategically important fields of innovation such as AI (artificial intelligence), biotechnology, deep tech, defence and climate tech.

Founded in 2018, the KfW subsidiary made investments of around EUR 2.9 billion in 153 venture capital funds with the support of the Federal Government/ERP Special Fund up until the end of the year 2025. To date, around 2,900 start-ups and innovative tech firms have received funding through the portfolio.

“Venture capital is a key funding source for technological innovation and strengthens Germany’s competitiveness and resilience as a business location. We invest across all sectors including artificial intelligence, climate tech, life sciences and dual use areas. In doing so, we develop and broaden the market. One third of our investments has gone to funds in their first and second generation,”

said Alexander Thees, Member of the Management Board.

Overview of key results data (as at 31 December 2025):

• VC funds invest nearly 4.8 times the capital brought in by KfW Capital in companies in Germany.
• The VC fund portfolio is broadly diversified: 47 per cent of the funds focus on ICT (Information and Communication Technology), 21 per cent on life sciences, 9 per cent on industrial tech, and 23 per cent of the funds invest across a range of sectors.
• Approx. one third of the VC funds are ‘emerging funds’, that is, first- or second-generation funds. The share of around one third underscores the targeted support KfW Capital provides to new management teams and the further development of the European VC ecosystem.
• More than half of all VC funds in the portfolio also invest in start-ups with AI relevance.
• The VC fund portfolio includes some 20 classified impact funds and around 40 other VC funds which, although not classified as traditional impact funds, also invest specifically in, among other things, social and ecological areas. Some 15% of the portfolio companies (out of around 2,900) contribute to ecological impact while just under one fourth is attributable to the social area.
• All VC funds in the KfW Capital portfolio have an ESG policy. Having such a policy is a major investment requirement for receiving funding from KfW Capital.
• In addition to its investment activity, KfW Capital is also active in venture education in order to enhance knowledge about venture capital. Events held last year included the “KfW Capital VC Academy” series of events and – together with partners – ESG training for VC funds as well as cooperation events with the Munich Technical University and the Frankfurt School.

Mobilising private capital

The Growth Fund Germany, in which KfW Capital acts as an investment adviser, was almost fully invested at the end of 2025 – just over two years after the final closing. Around 850 million euros of the fund volume of just over one billion euros was committed to 42 venture capital target funds by the end of the year. More than 400 innovative technology firms, in turn, were reached via these fund investments. The Growth Fund Germany is one of Europe’s largest VC funds of funds, with nearly 70 per cent of the fund volume originating from private investors such as insurance companies, superannuation funds, foundations, asset managers and family offices.

“The smart interplay of private and public capital enables us to also win over new investor groups for the asset class of venture capital. Fundraising for the second fund generation, the Growth Fund II, for which KfW Capital will again be acting as an investment adviser and intermediary, will begin soon,”

said Dr Jörg Goschin. The Growth Fund II targets professional and semi-professional investors in Germany and abroad.