KfW Capital in 2023

By 31 December 2023, KfW Capital had invested in a total of 112 VC funds – with a volume of around EUR 2.2 billion. The fund portfolio is broadly diversified. Around 45% of the VC funds focus on ICT, 21% on life science and 6% on industrial tech, and 28% invest across sectors.

On average, the VC funds invest more than four times the capital contributed by KfW Capital in start-ups and innovative companies in Germany. More than half of the VC funds are based in Germany. A total of around 2,000 start-ups and innovative technology companies have been financed by the VC funds to date.

* Special effect due to Corona Matching Facility of around EUR 685 million (incl. EIF and CIF, excl. ERP start-up fund)

The Future Fund of the German Federal Government, which will grow to EUR 10 billion by 2030, the additional public funds and the private capital already mobilised have developed a significant impact in the past year. By the end of 2023, nine components of the Future Fund, which KfW Capital is coordinating on behalf of the Federal Government, will already be active. In total, more than EUR 10 billion is available for start-ups and innovative growth companies to apply for according to their needs. More than EUR 2.2 billion has already been drawn.

KfW Capital itself has implemented the following Future Fund modules to date:

• ERP / Future Fund Growth Facility
• Emerging Manager Facility
• Green Transition Facility
• Growth Fund Germany

Other components of the Future Fund:

• VTGF (KfW)
• Regio Inno Growth (KfW)
• GFF-EIF Growth Facility (EIF)
• DeepTech & Climate Fund
• ETCI (EIF)

More information

With the successful completion of the fundraising in November 2023, KfW Capital reached the target volume of EUR 1 billion for the Growth Fund Germany and thus launched another important component of the Future Fund of the German Federal Government. The Growth Fund Germany is one of the largest VC umbrella funds ever launched in Europe – and is mainly fed from private funds. In addition to the Federal Government and KfW Capital, investors include over 20 significant institutional investors, including underwriters, pension schemes, foundations, asset managers and large family offices. The growth fund, for which KfW Capital acts as an investment intermediary and adviser, invests together with other investors in VC funds with an investment focus on Europe and Germany.

Access to urgently needed growth capital will be significantly improved for start-ups and innovative technology companies, strengthening Europe and Germany as centres of innovation. By the end of the year, the Growth Fund Germany had already invested around EUR 300 million in 18 VC funds.

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Together with the BMW Foundation Herbert Quandt and Venture ESG, KfW Capital organised the “Leading in ESG” training series. The training is designed to help VC funds integrate ESG aspects into their business strategy. Background: sustainable and responsible investment is becoming increasingly important for VC investors. There is a lot of interest. Thus far, 14 funds in total have participated in the training courses held last year. The good news is that the training will be offered again in 2024, including an event specifically for emerging managers.

Reporting on ESG – this is an increasingly important topic for KfW Capital and the portfolio funds. KfW Capital specifically asks VC funds and their portfolio companies for ESG data, such as greenhouse gas footprint or gender distribution among employees. In 2023, KfW Capital further developed the recording, administration and reporting of ESG data and further professionalised ESG reporting together with the more than 100 VC funds in which it has invested so far.