German Start-Ups Raise EUR 1.6 Billion in Q1 2025 as Early-Stage Deals Rise and U.S. Investor Activity Slow

German Start-Ups Raise EUR 1.6 Billion in Q1 2025 as Early-Stage Deals Rise and U.S. Investor Activity Slow

(IN BRIEF) German start-ups raised EUR 1.6 billion in 295 funding rounds during Q1 2025, according to the KfW Venture Capital Dashboard. While this marks a 14% increase from Q4 2024, it falls short of the same period last year and features fewer transactions. Early-stage firms contributed 51% of deal volume, while scale-up investments declined. The absence of megadeals and reduced U.S. investor activity—down to just 13%—played a role in this shift. However, the number of exits rose for the second consecutive quarter, with 43 transactions, mostly acquisitions. Although public market volatility continues to challenge exit strategies, a supportive interest rate environment may bolster future VC activity in Germany.

(PRESS RELEASE) FRANKFURT, 14-Apr-2025 — /EuropaWire/ — German start-ups secured approximately EUR 1.6 billion in venture capital funding across 295 deals in the first quarter of 2025, according to the latest figures from the KfW Venture Capital Dashboard. While the quarter saw a solid start to the year, the data suggest a mixed outlook with no clear directional trend yet emerging.

“The German VC market began 2025 with notable momentum,” said Dr Steffen Viete, venture capital expert at KfW Research. “However, the dynamics remain somewhat uneven when compared with previous periods.” Deal volume rose 14% over the final quarter of 2024 (EUR 1.4 billion), yet remained below the EUR 1.9 billion recorded in Q1 2024. Additionally, the number of transactions was down compared to both prior quarters.

Unlike in previous quarters, the beginning of 2025 did not feature any megadeals (i.e. financings over EUR 250 million), which had previously played a large role in boosting quarterly totals. Despite this, early-stage companies—those still in the start-up phase—contributed strongly to the overall deal volume, accounting for 51%, up from 43% in the previous quarter.

In contrast, investment in scale-ups—companies beyond the initial start-up phase—declined to 39% from 43%. This reduction coincides with a significant pullback by U.S. investors, who are typically active in larger growth rounds. Their share of German VC deal volume dropped to just 13%, well below the norm.

Exit activity, however, continues to trend upward. A total of 43 exits—primarily through acquisitions—were registered in the quarter, marking the second consecutive increase in such transactions. “Exit activity remains robust in terms of volume,” noted Dr Viete.

Nonetheless, public market volatility is posing challenges for exit realisation, particularly for IPOs. On a more positive note, the relatively stable interest rate environment in Europe is expected to continue providing tailwinds for venture capital activity in the months ahead.

The full analysis is available in the current KfW Venture Capital Dashboard. For broader insights into Germany’s economic trajectory and future-readiness, KfW Research’s new position paper, Managing the Transition, Strengthening Growth, is also available for download.

Media Contact:

Ms. Nina Luttmer
Tel: +49 69 7431 41336
email: nina.luttmer@kfw.de

SOURCE: KfW Development Bank