German start-ups raised approximately EUR 1.3 billion in the third quarter of 2025, a decrease of 47 percent compared to the previous quarter. According to the latest KfW Venture Capital Dashboard, published by KfW Research, this decline follows a second quarter marked by six significant funding rounds exceeding EUR 100 million each. In contrast, only one such mega round occurred in the third quarter. The total number of transactions, at 200, was only slightly lower than in the previous quarter.
KfW Research reports that if this downturn is temporary, the German venture capital market could end the year with deal volumes similar to recent years, potentially reaching around seven billion euros. By the end of September, total deal volume stood at EUR 5.3 billion compared to EUR 7.5 billion for all of last year. However, if weakness continues into the final quarter, annual transactions may fall short of expectations.
Dr Dirk Schumacher, Chief Economist of KfW, commented: “The German venture capital market is showing itself to be relatively robust given the weak economic growth, international trade conflicts and intermittent disruptions in the capital markets.”
Schumacher added: “Exiting from enterprises remains difficult for investors. The route of initial public offerings, for example, was blocked for vast stretches of the year because of the fragile situation in capital markets. Reviving the exit channels is increasingly becoming the key factor for the long-term growth of the venture capital market.” There were 35 exits from enterprises in the third quarter and a total of 112 exits over the first nine months.
Despite ongoing political and economic challenges, US investors continue to play an important role in Germany’s start-up ecosystem. In the third quarter they accounted for 27 percent of funds invested in German start-ups.
Venture capital activity also declined across EU countries during this period; however, France saw an increase as its start-ups raised USD 2.9 billion—more than in previous quarters. Meanwhile, venture capital markets in both the United States and United Kingdom reported strong performances during this time.