After a slow start to the year, the German venture capital market showed significant growth in the second quarter. German start-ups raised EUR 2.4 billion in new capital, marking a 45% increase from the previous quarter and bringing the total transaction volume for the first half of the year to just under EUR 4 billion. This represents a continued upward trend over three consecutive six-month periods.
These developments were highlighted in KfW Research's Venture Capital Dashboard, which provides quarterly updates on Germany's venture capital market. Dr Dirk Schumacher, Chief Economist of KfW, noted that "this trend is particularly pleasing because the conditions in the first half of 2025 were rather challenging." He cited US tariff policies as a factor weighing on investment environments.
In total, there were 208 funding rounds for German start-ups in Q2, with 98 exceeding EUR 1 million each. The six-month period saw a total of 735 financing rounds, including 198 above this threshold. Notably, two companies joined Germany's unicorn list at this time—start-ups valued at USD 1 billion or more—bringing their number to a record high of 32 by mid-year.
The scale-up segment played a major role in Q2's growth, accounting for 57% of investments through large individual financing rounds. These transactions often involve US investors who contributed significantly to German start-up funding during this period; their share rose to about 30%. Despite economic uncertainties related to US policies under President Donald Trump, Dr Dirk Schumacher confirmed that no negative impacts had been observed on foreign investments from American venture capital providers.
KfW Research also released another study focusing on cross-border venture capital trends between Germany and Europe over recent years (2020-2024). Findings indicate strong interest from international investors—particularly those based in America—with approximately EUR 37 billion invested into young German firms during this timeframe compared against an outward flow totaling around EUR21 billion toward foreign ventures by domestic players themselves: resulting overall net influx equaling roughly sixteen billion euros when viewed within European context alone outside Spain’s figures yet surpassing several other countries' outputs like Belgium Denmark Switzerland Netherlands Italy etcetera...
Dr Steffen Viete—a leading expert working alongside colleagues involved throughout aforementioned analyses processes conducted internally via various departments housed beneath larger umbrella organization known collectively simply enough ‘KFW’—summed up situation thusly stating: “The high influx on [our] VC market primarily reflects quality found amongst native-born entrepreneurs here locally plus potential seen internationally regarding innovative capacities future expansion possibilities alike."
Despite these positive indicators showing promise ahead financially speaking long-term success hinges upon continued support domestically too especially given heightened reliance external sources presently experienced vis-à-vis peer nations elsewhere continent-wide generally speaking... Dr Viete elaborated further: “Making [our] markets attractive remains important economic-policy task moving forward… Strengthening exit channels—opportunities IPOs takeovers alike—increases potential returns ensuring sustained prospects home soil.”
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