Good news at the end of the year: Green Transition Facility fully and successfully invested, boost for climate tech start-ups

• KfW Capital has invested approx. EUR 100 million in 7 VC funds
• First building block of the Future Fund successfully completed
• Improved access to capital for start-ups and innovative tech firms with a focus on the “green transition”

Good news at the end of the year: The Green Transition Facility that was introduced in June 2023 with a term of 24 months is already fully invested after one and a half years. KfW Capital has fully invested the EUR 100 million provided by KfW in seven VC climate-tech funds that finance start-ups and fast-growth enterprises in Germany with a focus on “ecological change”. Specifically, these are the following VC funds: AENU, Contrarian Ventures, Extantia, Forbion BioEconomy, Nordic Alpha Partners, Norrsken VC II and Future Energy Ventures. That makes the Green Transition Facility the first building block of the Federal Government’s Future Fund to be fully and successfully invested. It contributes to the Federal Government’s start-up strategy, which has defined improving the financing environment for climate tech as its key area of action.

Stefan Wintels, Chief Executive Officer of KfW Group and Supervisory Board Chair of KfW Capital:

“The success of the Green Transition Facility is a positive signal for the VC ecosystem in Germany in several respects. The facility effectively reinforces the growth field of climate tech, directly benefiting green tech start-ups. KfW Capital is systematically investing in accordance with its mandate, and the Future Fund is continually unfolding its effect. I congratulate the colleagues at KfW Capital on the achievement of this milestone.”

“Within a period of only one and a half years, we have successfully invested our Green Transition Facility in very professional VC funds that have this specific investment focus. This has provided a strong boost to innovative climate technologies and thus to the ecological transformation in Germany, which is so important for the future of all of us”,

said Dr Jörg Goschin, Co-CEO of KfW Capital. VC funds typically invest for a period of around five years, during which they build up their portfolio of start-ups and fast-growth enterprises. To date, more than 70 start-ups have already been financed from funds of the Green Transition Facility.

In order to qualify for funding under the Green Transition Facility, it was important for VC funds to have their investment focus on “climate tech” or associated climate-relevant thematic fields (definition based on the EU Taxonomy Regulation 2020/852). Climate tech fonds operate in the areas of AI, e-commerce, software, energy and environment as well as industrial and consumer products. As in all programmes, KfW Capital again invested at equal terms and conditions with other private capital providers, providing a maximum of 19.9% of the fund volume.

Climate tech funds that are in the fundraising phase also have the option of receiving additional funds from KfW Capital under the “ERP VC Fund Investments” and ERP/Zukunftsfonds (“Future Fund”) Growth Facility programmes.

Note: Further information on the programmes of KfW Capital can be found at: KfW Capital’s investment programmes.