KfW Research: German venture capital market grows significantly in the second quarter

The German venture capital market grew significantly in the second quarter of 2025. According to the latest KfW Venture Capital Dashboard, German start-ups raised around 2.4 billion euros. This corresponds to an increase of a whopping 45% compared to the previous quarter. The number of financing rounds climbed to 208, 98 of which were in the millions.

Particularly striking: the number of unicorns, i.e. startups with a valuation of over 1 billion US dollars, rose to 32, a new record for Germany.

Large deals drive the scale-up segment

According to KfW, growth was primarily driven by large scale-up financing deals: Deals in the EUR 100 million range and above dominated the scene. In total, scale-ups accounted for 57% of the capital invested in the German market.

The effects of US trade policy under Trump have not yet been reflected in a decline in investment.

Dr. Dirk Schumacher, Chief Economist at KfW

The international flow of capital also increased. Over 30% of funds came from US investors, a noticeable increase compared to the first quarter.

Foreign interest in German start-ups continues unabated

An accompanying study by KfW Research shows that from 2020 to 2024, foreign investors invested around 37 billion euros in German start-ups, more than in almost all other European countries. In the same period, German venture capitalists invested around EUR 21 billion abroad. Germany thus achieved a net capital inflow of around 16 billion euros.

This shows how attractive German start-ups are perceived internationally - both in terms of their innovative strength and their scalability.

Dr. Steffen Viete, venture capital expert at KfW

Capital inflow: opportunity and risk at the same time

However, the strong dependence on foreign capital is a double-edged sword, according to the KfW experts. In times of crisis, this could lead to increased volatility. There is also a risk of start-ups, talent or intellectual property migrating abroad.

Dr. Viete emphasizes:"A strong German VC market with robust exit channels is key to offering domestic start-ups attractive long-term prospects - and keeping capital in the country."

The current Kfw Venture Capital Dashboard can be downloaded here can be downloaded here.

Assessment of the Startbase

A turnaround in the development of venture capital in Germany was certainly urgently needed. The resulting future economic output and the corresponding impact alone are urgently needed in the country. The net inflow of funds is also positive.

However, if the EUR 2.4 billion mentioned is compared internationally, the sum appears extremely low. Especially in the field of AI, these amounts are achieved by some of the big tech players. If Germany wants to continue to play a role in this market in the future and not be overrun by the threat of platform effects, the framework conditions for founders and start-ups must be significantly improved.