• Start-ups raised EUR 4.5 billion – best quarter since the end of 2021
• Transaction volume in the first nine months is already higher than in all of 2025, 2024 and 2023
• Development is driven mainly by a few large deals

The German venture capital market has experienced a very successful third quarter. Domestic start-ups raised more than EUR 4.5 billion – a good one third more than in the strong previous quarter and almost four times more than in the third quarter of 2025. Measured by deal volume, it was the strongest quarter since the fourth quarter of 2021.

Overall, young innovative firms in Germany received EUR 9.5 billion from capital investors between January and September. The venture capital (VC) market thus already boasts a higher volume than it did in all of 2023 (EUR 7.1 billion), 2024 (EUR 7.5 billion) and 2025 (EUR 7.3 billion).

These are some of the findings of the KfW Venture Capital Dashboard, in which KfW Research publishes quarterly data on the German VC market.

The positive development was driven primarily by a few but very large funding rounds. Six mega deals with a volume of more than EUR 100 million each came to a combined total of around EUR 3.5 billion. At the same time, the number of transactions of one million euros or more fell in the third quarter to just 89, one of the lowest levels in the past years. So far this year there have been 276 deals of one million euros or more, after 304 in the same period last year and 324 in the first nine months of 2024.

Funding conditions for young innovative enterprises in Germany have continued to improve this year. The increase in investments shows that Germany has start-ups that are attractive to many investors, said Dr Dirk Schumacher, Chief Economist of KfW. However, capital is currently concentrated in increasingly fewer enterprises. Companies that convince investors can raise significantly more capital than just a few years ago. For many start-ups that are not on the cutting edge, however, raising sufficient finance remains a major challenge.

The issue of artificial intelligence (AI) played a decisive role in the deals closed in the third quarter. Around EUR 3.1 billion went to start-ups from a range of sectors addressing the topic of AI in 61 funding rounds in the third quarter. That was 69 per cent of the total deal volume. Investments in start-ups with a focus on AI have reached a sum of EUR 6.3 billion since the beginning of the year. That was roughly twice as much as in the previous record year 2025, in which the total for the year reached EUR 3.2 billion.

Recently there have been 43 unicorns in Germany – young unlisted firms valued by investors at one billion US dollars or more. At the beginning of 2021 it was only twelve.

We are cautiously optimistic for the development of the venture capital market, said Dr Dirk Schumacher, Chief Economist of KfW. The current economic rebound in Germany is also helping the VC market and can support it. At the same time, the high inflation and rising interest rates will tend to weaken the VC market. We expect the current trend to continue. Capital will concentrate on a few large funding rounds of successful companies in the coming months as well, while the development across the broader market is likely to be weaker.

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