The German venture capital market showed signs of recovery in 2024, with start-ups raising approximately EUR 7.4 billion, a 4% increase from the previous year. The number of financing rounds also saw a significant rise, reaching 1,407 compared to 1,136 in 2023. These insights are based on the KfW Venture Capital Dashboard, which provides quarterly updates on the market.
In the fourth quarter of 2024, businesses secured EUR 1.4 billion, a decrease from EUR 2.4 billion in the third quarter. However, deal numbers increased to 484 from 327 in the previous quarter. Only during 2021 and 2022 did German start-ups experience more financing deals than last year.
Dr Steffen Viete from KfW Research noted that "the slump in sentiment in the venture capital market appears to be largely over," attributing this to interest rate cuts by both the ECB and Fed. He anticipates further moderate rate reductions in 2025, potentially enhancing market conditions and maintaining investment levels similar to those of 2024.
The energy sector attracted the highest investment volume at EUR 1.2 billion last year, highlighting sustained interest in sustainable energy solutions. Health care followed closely with investments totaling EUR 1 billion. Security-related sectors also saw growth due to geopolitical tensions, securing over EUR 500 million.
Artificial intelligence (AI) continued to draw investor attention with over EUR 1.8 billion raised across 244 transactions – marking it as the second strongest year for AI funding after 2021.
US investors contributed significantly to this landscape by providing around 30% of total investment volume last year. German investors accounted for about 28%, while UK investors contributed approximately 8%.
Additionally, there were reports of increased exits from VC-funded start-ups with a total of144 exits recorded throughout Germany making it two consecutive years showing an upward trend.
Accordingly Dr Steffen Viete stated: “There was a particular rise in exits via takeovers," but acknowledged that many exit proceeds might not have met expectations yet emphasized their importance within VC markets’ funding cycles moving forward into this current fiscal period.
The latest data is available through KfW Research's Venture Capital Dashboard.