VC business climate back in green zone

The venture capital business climate improved significantly at the end of 2020. The corona-induced drop in sentiment has thus been recovered.

The business climate indicator for venture capital increased by 26.7 points to 17.0 balance points at the end of 2020, while the assessment of the current business climate (+28.3 points to 16.1) and business expectations (+25.2 points to 17.8) recorded similarly high gains. This is the result of the latest investor barometer of the German Private Equity and Venture Capital Association (BVK) and the development bank KfW.

The rising values also show that the renewed lockdown has not unsettled the industry. Overall, the anti-corona measures seem to have affected the start-up scene less broadly than initially feared.

"The venture capital year has ended on a conciliatory note. The progress made with the Future Fund and the Fund Location Act were two important mood boosters in the final quarter and, unimpressed by the new 'lockdown', provide a good basis for the start of the year," says Dr. Fritzi Köhler-Geib, Chief Economist at KfW Bankengruppe.

The industry association BVK is optimistic about the future in light of the figures. "VCs and their start-ups have learned how to deal with the situation and hold their own in a challenging environment. The rapid recovery in sentiment speaks to the increased robustness and maturity of the market and makes us optimistic for 2021," says Ulrike Hinrichs, managing board member of BVK.