Two years after its final closing, the German Growth Fund is deploying nearly €825 million of its approximately €1 billion fund volume in 41 venture capital target funds. These target funds now finance more than 360 technology companies from a wide range of sectors. Funds It shows an early positive performance because the portfolio companies address key future issues and present viable business models.
KfW Capital conceived the fund on behalf of the German Federal Government, structured the model, was responsible for fundraising, and now acts as investment advisor. Universal Investment Group is responsible for fund management. With its volume, the fund is one of the largest venture capital fund-of-funds in Europe, mobilizing over 70 percent private capital – an example of how an attractive structure draws investors from new groups into the venture capital asset class. As things stand, the fund is expected to be fully invested by the first half of 2026.
Portfolio is growing broadly and dynamically
The Portfolio building The fund remains broadly diversified, with 39 percent allocated to the Information and Communication Technology (ICT) sector, 35 percent to Life Sciences, and 26 percent to Deeptech, Industrialtech, Climatetech, or Foodtech. Based on investment phase, the fund invests 54 percent in growth funds, 35 percent in early-stage funds, and 11 percent in generalist funds.
"The Growth Fund has established itself as a strong instrument for growth capital in Europe. Its innovative structure has enabled a smart interplay between public and private capital. It is particularly encouraging that new investors from the private sector have been attracted to the venture capital asset class. The Growth Fund Germany focuses its investments on the crucial growth phase, in which technology companies scale and finance their growth. For the remaining fifth of the investment amount, we continue to see attractive opportunities for portfolio diversification, both at the VC fund level and for direct co-investments. Currently, following the valuation correction of the boom years of 2020 and 2021, the timing for VC investments is very favorable, and several very promising VC funds are currently raising funds."
says Jörg Goschin, Chairman of the Management Board of KfW Capital.
International attention is growing: Several countries are examining the fund's structure in order to launch similar products.
"The German Growth Fund as an export hit – this too is a strong signal for the market and for more private capital for the VC ecosystem,"
so Goschin.
KfW Capital is already developing the Growth Fund II, whose fundraising will start in 2026 and will again target professional investors at home and abroad.
