KfW Capital in 2021

As a wholly-owned subsidiary of KfW, KfW Capital aims to sustainably improve the provision of venture and growth capital to innovative technology companies in Germany. KfW Capital invests in German and European venture capital funds (VC funds) with support from the ERP Special Fund and the Federal Government's Future Fund (“Zukunftsfonds”), thereby indirectly giving innovative German technology companies better access to growth capital by strengthening the funds’ capital base and boosting Germany as an innovation hub.

As a responsible VC fund investor, KfW Capital attaches particular importance to sustainability and impact assessment. KfW Capital carefully considers environmental, social and governance (ESG) criteria for the target funds and their portfolio companies.

Find out more about KfW Capital

KfW considerably expanded promotion of start-ups and innovative technology companies last year by providing growth capital. Commitments in the KfW Capital business sector amounted to around EUR 502 million in 2021 (including commitments by the European Investment Fund (EIF), and commitments in connection with the Federal Government’s coronavirus package of measures for start-ups and the German Future Fund, 2020: around EUR 871 million).

The decline in commitments in 2021 was solely due to the scheduled expiry on 30 June 2021 of the coronavirus aid programme for start-ups launched in 2020 (pillar 1 of the coronavirus package of measures for start-ups 2021: around EUR 20 million, 2020: around EUR 685 million/including EIF/High-Tech Start-up Fund, excluding the ERP Start-up Fund). The commitment volume in the ERP Venture Capital Fund Investments programme, which KfW Capital is implementing with the support of the ERP Special Fund, reached the previous year’s level as planned (EUR 187 million, 2020: around EUR 184 million). KfW Capital thus participated in a total of 11 VC fund investments.

Commitments were also made for the first time in the Future Fund. These provided a significant boost to the volume of VC fund investments (click here for more details: Successful launch of the Future Fund).

Since June 2021, KfW Capital has also been investing in European VC funds with a focus on Germany through the ERP/Future Fund – Growth Facility, which was launched as part of the Federal Government’s Future Fund. Around EUR 111 million had already been invested by the end of the year. At the same time, the EIF also invested resources from the Future Fund administered by KfW Capital on behalf of the Federal Government for the first time. The EIF has committed approximately EUR 183 million since June alone under the German Future Fund (GFF) EIF Growth Facility it manages. The VC funds have to invest at least the amount committed as part of these programmes in start-ups and young, innovative technology companies in Germany.

The coronavirus aid programme for start-ups financed by VC funds (pillar 1 of the Federal Government’s aid packages for start-ups, through KfW Capital, EIF, High-Tech Start-up Fund and ERP Start-up Fund), which expired as scheduled on 30 June 2021, was a significant contributing factor in stabilising the venture capital market during the first 18 months of the crisis.

• The measures helped to stabilise the market particularly after the first quarter of 2020 when VC market sentiment had fallen to a record low.
• The funds initially applied for capital for around 300 companies and ultimately drew much less from the aid programme for start-ups due to the VC market’s strong recovery during 2020 and the first half of 2021.

Legal notice:
The information contained in this online Annual Report 2021 is based on KfW’s Financial Report 2021, which you can download here. Should this online Annual Report 2021, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2021 takes priority.