Strong impetus for impact venture capital funds: EUR 200 million facility available from KfW Capital

• VC impact funds combine financial returns and measurable impact
• 11th building block of the Federal Government’s Future Fund

Strong boost for impact venture capital (VC) funds: They now have a further option for accessing capital. Under the new “Impact Facility”, and effective immediately, KfW Capital will be investing in German and European VC funds that invest with the aim of achieving not just financial returns but measurable social or ecological impacts. The impact funds, which include Germany as their investment focus, may receive up to EUR 15 million and a maximum of 25 per cent of the fund volume. KfW Capital first performs customary due diligence (DD) as in all other programmes, which covers a broader assessment of the funds’ impact-related capacities and processes, and the investments are subject to the same conditions as private VC fund investors. The “Impact Facility” is already the 11th building block of the Federal Government’s Future Fund, which aims to significantly expand growth capital finance by the year 2030 and beyond, with EUR 200 million now available for impact investments up until 2030.

“The fact that we are strengthening our innovative capacity for a better future is of great significance for the overall economy. Impact funds are particularly committed to combining responsibility and returns. They specifically direct capital to start-ups and fast-growth enterprises that develop and bring to market social or ecological innovations. On behalf of the Federal Government, we are now giving the VC market a boost in order to provide impact funds with even more capital than before and substantially improve the financing conditions in this segment”,

said Dr Jörg Goschin, CEO of KfW Capital.

VC funds of any size are eligible to apply. In order to make their impact focus transparent, impact funds set themselves dedicated impact targets in their portfolio companies, monitor them through regular measurements and make part of the fund management’s compensation contingent on achieving those targets (known as impact carry).

Note: Further information can be found at: www.kfw-capital.de/investmentfokus

About the Future Fund:

The Federal Government’s Future Fund aims to significantly expand growth capital finance by 2030 and beyond by allocating public funds and mobilising private capital. Start-ups that are in the growth phase and have high capital requirements benefit from the various building blocks of the Future Fund. Additional funds from the ERP Special Fund, the EIF, KfW, KfW Capital and private investors will substantially leverage the initial sum (EUR 10 billion by 2030). To date, 11 modules (Impact Facility incl.) with a volume of more than EUR 13 billion have been launched; the building block “Green Transition Facility” is already fully invested. KfW Capital is coordinating the individual building blocks of the Future Fund jointly with the Federal Ministry for Economic Affairs and Climate Action and the Federal Ministry of Finance as well as KfW, the European Investment Fund (EIF), the High-tech Start-up Fund (HTGF) and the Deep Tech and Climate Fund (DTCF). Further information on the Future Fund can be found here: Zukunftsfonds ("Future Fund").