While Munich startups While companies can hardly complain about a lack of investment, investors are less optimistic about the near future. A KfW index, which measures the business climate in the venture capital market, is pointing downward. But there are also positive signs.
The development bank KfW publishes figures on the German venture capital market every quarter. third quarter This year, the business climate among German venture capitalists has cooled. The corresponding index fell by 6.1 points to 16.8. However, compared to previous readings, the VC market is still performing well: the historic low is -50.6 points.
The current business situation of German VC investors even improved by 2.7 points to 26.5 points in the last quarter. However, expectations for the next six months look bleak: The corresponding index plummeted by 14.8 points to 7.1.
“There is currently no clear trend for the development of the business climate”
Raising money, however, doesn't seem to be a problem. The fundraising climate is improving after a weaker second quarter and is just below its historic high. The depreciation situation and the innovation climate are also receiving more positive ratings. The exit climate, however, is plummeting and is just below negative territory for the first time since early 2014.
Deal flow shows two opposing trends: The assessment of the level of VC deal flow is increasing slightly. At the same time, satisfaction with deal flow quality is declining. According to KfW, this could be related to startups seeking capital perceiving their entry prices as excessive. This is also indicated by the assessment of entry prices falling by 15.8 points to -47.6.
“There is currently no clear trend for the development of the business climate on the German venture capital market,”
says George Metzger by KfW Research. Ulrike Hinrichs, executive BVK board member, says:
"The stable positive sentiment and strong demand for venture capital should lay the foundation for another strong venture capital year. Venture capital is the preferred financing option for a growing number of ambitious founders. For VCs, this means identifying the most relevant and attractive investment requests from the multitude of investment requests."
