KfW Research: Solid start to the year for the German venture capital market

Fresh capital for German start-ups: KfW Research reports EUR 1.6 billion in the first quarter - with a growing share of early-stage financing

German start-ups raised around 1.6 billion euros in the first quarter of 2025. This is shown by the latest venture capital dashboard from KfW Research. Despite the solid volume, individual developments must be viewed in a differentiated manner.

More capital - fewer deals

According to KfW Research, 295 financing rounds were counted in the period from January to March. The investment volume amounted to around EUR 1.6 billion. This means that the volume is 14% higher than in the previous quarter, when EUR 1.4 billion was raised. However, it is down on the first quarter of 2024 (€1.9 billion).

What is striking is that the number of deals has fallen compared to both previous quarters. According to KfW expert Dr. Steffen Viete, the year got off to a stable start, but a clear trend cannot yet be identified.

No mega deals in the first quarter

One reason for the relatively low total volume compared to the previous year is that there have been no so-called megadeals with a volume of over 250 million euros so far this year. In the past, these had often driven up the overall level. The current distribution therefore shows a more differentiated picture.

Early-stage financing is on the rise

More than half of the capital raised (51%) flowed into start-ups in the early founding phase. In the previous quarter, the proportion was 43%. This indicates increased activity in the start-up phase.

In contrast, the proportion of financing in the scale-up segment, i.e. for companies in the growth phase, fell from 43% to 39%. One possible reason for this is that the participation of US investors, who are often present in large rounds in later phases, has decreased significantly. Their share of the total volume was only 13%.

Exit activity continues to increase

KfW Research highlights the positive development in exits. A total of 43 exit transactions were registered in the first quarter - mostly through takeovers. This means that the number of exits increased for the second quarter in a row.

Exit activity remains high in terms of the number of deals

Dr. Steffen Viete, KfW expert

However, volatility on the public markets remains a factor of uncertainty. This could make it more difficult to realize further exits.

Outlook remains cautiously positive

Despite uncertainties on the capital markets, the mood remains cautiously optimistic according to KfW. The interest rate environment in Europe in particular could give the German venture capital market a boost in the spring. However, the final development is only likely to become apparent in the coming quarters.