Sentiment among venture capital investors in Germany has improved after a sharp decline earlier this year, according to the latest quarterly VC Barometer produced by KfW Research and the German Private Equity and Venture Capital Association (BVK). The business sentiment indicator for the venture capital market rose by 18.5 points to -0.3 balance points in the third quarter of 2025, placing it just below its long-term average.
Dr Dirk Schumacher, Chief Economist of KfW, commented on the shift: “The Trumpian tariff policies led to a phase of uncertainty, but that appears to be over now. In the third quarter, business sentiment among venture capital investors made up for the downturn in sentiment seen in the early summer.”
Investors' assessment of current conditions improved compared to the previous quarter but remained negative at -11.9 points. Six-month business expectations saw a notable rise, reaching levels not seen since late 2021; this indicator increased by 25.9 points to +11.3 balance points.
Ulrike Hinrichs, Managing Director of BVK, stated: “The significantly more optimistic business expectations give reason to hope for strong investment at the end of the year and continued improvement in sentiment.”
Despite these positive shifts in outlook and expectations, there was an unexpected drop in investment appetite among VC investors during the third quarter. This may be linked to higher entry prices for new investments as start-up valuations have risen. However, VC investors continue to view German start-ups seeking funding as high-quality and innovative.
KfW produces its quarterly German Venture Capital Barometer together with BVK for Handelsblatt.