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The Only Venture Capital Data for Germany You Need To Know

Aktualisiert: 5. Juli

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This blog post first appeared first on old medium publication (, and was moved to this blog with the relaunch of our website in summer 2024.

Executive Summary

The kfw surveys each quarter around 450 investors for this barometer, so it is one of the broadest and most reliable indicators of the current mood of private market investors in Europe’s largest economy. In this episode, we have Dr. Fritzi Köhler-Geib, the chief economist of kfw, as a guest. She introduces us to the barometer that has 3 main components: business climate, (current) business situation, and business expectations (for the next quarter). There are also 12 subcategories covering areas like fundraising, entry evaluations, exit opportunities, new investment, deal-flow quantity, deal-flow quality, and even the taxation framework. Tune in to learn more.

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The VC and PE index has components that look forward and backward.Fritzi Köhler-Geib, Chief Economist kfw

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The Audio Interview

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The Chief Economist

Dr. Friederike “Fitzi” Köhler-Geib is the chief economist ( of kfw. Dr. Köhler-Geib has studied at HEC in Paris, the University of Michigan in the US, the University of St. Gallen in Switzerland, and Pompeu Fabra University in Barcelona in Spain. She is still a fan of Michigan’s Wolverines by the way. She holds a Ph.D. in Economics from Ludwig Maximilian University Munich and Pompeu Fabra University. Before becoming the chief economist, she spent many years in Washington D.C., working for the international monetary fund and the world bank. She was at the world bank the lead economist for Central America and the Senior Economist for Latin America. In these functions, she also traveled quite frequently to Central and South America.

The kfw

kfw ( is a wholly government-owned development bank, based in Frankfurt am Main. The bank has a public mandate to assist federal and state governments with administrating (mostly loan) programs.

According to the total size of its balance sheet, it was Germany’s 3rd largest bank in 2018. The whole kfw group includes several specialized units, including kfw capital ( to promote innovation and growth, which also administrates multi-billion euros in VC investments, mostly as LP in other funds.

The Venture Capital and Private Equity Barometer

For the VC and PE index ( the kfw research department surveys around 450 investors quarterly. They are members of Germany’s PE and VC Association ( and part of the Deutsche Börse Venture Network ( on many dimensions of their outlook for the next quarter and business in the last quarter.

Not all data is available on the website in English, but the index has now a history of more than 80 quarters.

The index has three main components and 12 subcategories. The main categories are business climate, (current) business situation, and business expectations (for the next quarter).

The subcategories cover areas like fundraising, entry evaluations, exit opportunities, new investment, deal-flow quantity, deal-flow quality, deal-flow innovativeness, taxation framework, write-downs, economy (overall), interest rates, and funding.

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The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Reach out to him:

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All Links and Show Notes

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Topics Discussed in this Interview

In this interview, we are talking about

Automated Transcript

[0:00] Music.

[0:16] And Live Events.Hello and welcome everybody this is Joe from your startup podcast and need to block from Germany today I do have a very special guest because she’s neither.And investor Nora startup but she’s the chief Economist of German Bank TFW hello and welcome.Hi urine nice to be here hardly my pleasure I’m you are.Dr. fritzi cooler gipe will spell it out for you down here to showing us why everybody who doesn’t speak German and you are the chief Economist of kfw we met at that cave W is not a usual Business Bank but it’s a government owned bank that helps with the in Economic Development and the implementation of federal programs and government programs at all.

[1:12] Exactly yeah it’s state-owned and its mission is to help transformation in Germany and worldwide and basically goes back to the time after the second world war where the idea was that, that the German economy is supposed to be based on a market economy but that you can have areas where you have market failures and it’s, this public bank that is helping in those areas of market failure to put incentives so that you see sufficient investment for example in areas like prevention of climate change which is a societal, go but you are here today because you as kfw especially your department of publishing in, index a private Equity barometer it is called so it’s a VC and PE investor in next I we’ve been quoting quite frequently on our regular news together with Chris I do believe we did it at least since 20/20 but I just realized your index is actually published since 2013 which is pretty awesome.Little bit about you are found you studied in Paris.

[2:36] University of Michigan at sanguillen and pompeu fabra in Spain so is you also speak some French some Spanish.

[2:46] We must sure SI senor.Oui bien and do you later went to work in Washington d.c. I’ve seen you work for World Bank and, I am F so my understanding is you basically live from 2008 to 2019 mostly in Washington d.c. because we talked before and you told me you’ve been quite traveling yes exactly so I was based in Washington DC but I was traveling to many places Pakistan Ukraine and then a lot of Latin American countries and towards the end I focused on Central America, Central America do you have a secret tip we can make great vacations Panama Costa Rica it’s I would they all are very different of course I’m an economist and from an economics perspective all those countries have very different can learn a lot and it’s fascinating economies really.

[3:47] And but I also have to say it’s beautiful countries.

[3:52] I would never dispute that and since 2019 year did the chief Economist at kfw and it would.Everybody knows I’m a big football fan you still watching games of the Michigan football team the Wolverines.

[4:09] Well I have to admit yes I was during my studies in Ann Arbor but for 6 months I’m not such a particular football fan I do a lot of sports myself and right ma in frequent Watcher of sports so that also applies to to football I have to say.ICC can we go a little bit into the index right now because I’m my understanding is it was started back in 2013 do you little know a little bit about the history why kfw actually started this barometer this index so the index actually started in the first quarter of 2003 so it’s even older than that maybe it let me go back to to the part of kfw.Correcting market failures in Germany Kev W as a bank has a daughter kfw capital and that was created in 2018 to Foster the development of the VC Market in Germany.

[5:30] Because there is the recognition that the state itself is not the best investor and is not so good in choosing a particular start up the idea of kfw capital is that it works as a fund of funds so that it basically puts public money into the market without choosing a particular startups but by choosing different investment Booth if you wish.

[6:02] And that started in 2018 to develop the market further.

[6:07] Hmm I see and we.

[6:13] We may get into K FW ad’ not that at another time and we want to stick a little bit with the index as I said the earliest version I could find is back in 2013 but nonetheless it’s I think nobody nobody would like to talk about the past can you tell us a little bit about how you get the data from this index my understanding is that there are two entities the German VC and PE Association that participates as well as the Dodge buzzer Venture Network both of them have several hundred.Investor members and actually you do survey with them right.Absolutely so we started out this product would be folk are with the German we see Association we are surveying.Round about 450.Fart but the focus has around 200 investors and later on we also joined with Deutsche buzzer there is another 450 investors and we have been surveying these investors now since ad quarters so we start to have some some.Time series.

[7:41] Observations about the German VC Market we may add for everybody who’s not familiar with Germany do to Bursa.Is the operator of the Frankfurt Stock Exchange but we here talking about a network they set up separately to help fund, early stage companies with VC and private Equity like so before we get into the actual index let’s have a little at break and be back in a few seconds.

[8:15] Paquet and how we are back will be mainly talking about the gym Venture Capital barometer as you call it at the most recent one is the fourth quarter of 2022 which is actually pretty fitting we’re recording this on the 15th of February 20 23 and all across the newspapers here in Germany they have been used that it.Collapsed I’m not too sure if I would use that dramatic fashion but nonetheless those newspapers still have to make a living I’m sure but before we talk about the current situation can we talk a little bit about.The index and how it is composed because my understanding is that there are three main.

[9:06] Component and then there a sub components like fundraising entry valuations, exid opportunities new Investments deal flow quantity beautiful quality deal flow innovativeness taxation framework writedowns economy interest rates and funding so.I assume if you dish out the survey and somebody has to reply to it it’s nothing you can do in like five minutes right, yeah so we are very thankful for the collaboration with with the investors that that we basically survey the index is.Calculated mmm.

[9:55] By asking for the assessment of the current situation in the market so the environment know and then also six months it had expectations and the climate all together is then basically a composite the necks of those two elements we then also have the.Components of the indicator that you that you mentioned that basically give insight into particular aspects of the VC Market that obviously a hockey for foreign investors and as you had already mentioned.

[10:41] The end of 2022, was rather gloomy in the German PC market it had appeared as if the downturn had come to a stop in the third quarter but then in the fourth quarter we did see the the index picking up the worsening, of the sentiment so my understanding is you give them.Um options like from very good to very bad and the investors evaluate all those points.On their scale respectively and then you aggregate this view of let’s say somewhere around 400 investors with.I understand investment interest and or headquartered in Germany.An aggregate all this together to come up with this in X that should.Paint a pretty decent picture of the current mood of the investors at the point of service was taken.

[11:50] Yeah and I would say it’s neither a backward nor forward looking indicator because it has both components now fib as we asked about expectations there is certainly a forward-looking perspective but we also asked investors about the the current some are their assessment of the current situation and we show both the the responses separately and then also as the climate know which puts those in DC’s together what’s also really important is that we put the the answers in perspective to the historical mean.And then show how how the answers deviate from that mean and and thereby we.In the current situation and the expectations are developing vis-à-vis that historical mean.

[13:02] Hmm I see em.And my understanding is because you talked about a forward-looking and Karen situation so the business situation right now is what they evaluate as business situation and the expectation is when you ask them what do you expect like six months down the road right.Yeah exactly what do you expect within the next 6 months yes I see there is a lot more information in everything we link here and I’ll link the website in English and as I said it’s from.Fourth quarter 20 22 to the first quarter of 2013 all the data available here and.My question would be how.Can somebody reading it actually use it assuming that a stating that 80% of my audience is.Located outside of Germany Austria or Switzerland so many of them don’t even have like physical or personal touch points with the market right now how could those people use this index how is it useful for them.Yeah I think it’s extremely useful because it gives the time series of.

[14:21] Assessments of investors in the German VC Market about the highly relevant.

[14:31] Elements know and and perspectives on the German VC Market be a good entry valuations beard fundraising environment period the assessment of quantity and also quality of deal flow so I think that gives a.

[14:56] In particular for people who are not so familiar with a market it gives a very quick overview of how main investors in the market assess the market at that point and also with with the six months Outlook.

[15:16] Mmm I’m talking about fundraising because when we talk here on the channel about fundraising it’s usually startups pitching investors but since you ask investors here I would assume this fundraising environment is for the VC investors actually pitching their investors meaning the Pension funds insurance companies what is generally referred to as LP limited partners yes.

[15:42] That’s basically how easily they can raise funds.For for for their investment booth and.Again a little bit different logic if you talk about entry valuations this one is pretty green then went up thirty four point two points in the one we just have ahead of us and I would assume it’s good for the investors that mean the entry valuations went a little bit down so for the entrepreneurs it should be read right Yeah so basically of course when when entry evaluations.

[16:24] Go up it means for investors that returns potentially go down while the inverse is true if the the evaluations go down which in a way are good because then you can you can achieve higher High Returns on the investment I see a sea and.Let me quickly get back here so that means also the deal flow quality and quantity everything is seen from the perspective, of the investors that would also mean if I look here the writedowns are pretty red that would mean the investors reply to had to take more writedowns than previously expected or they wanted to admittedly yes I know they know want to take write down but this one appears to be pretty red.Yeah and I think it also has to do with the fact that you have a lot of company valuations coming in in the fourth quarter and so I think it’s also.

[17:35] Quite plausible that that the indicators.Turned unfavorable in the fourth quarter because it’s true now we have been in a difficult economic environment you see writedowns then come in in the fourth quarter and that then also puts pressure on the sentiment in the VC Market mmm-hmm I see and there are also some.Baker indicators the economy I would assume that’s a question you asked investors what do you expect the economy to be.In the future all right now.Yes I also both know it’s basically the the economic activity altogether because clearly it impacts the VC Market as well of course then you always have a variety of startups and in different sectors that do differently well.But but the overall economic environment has relevant impact on those markets as well.

[18:51] As well as the interest rates of course they are right now right because they are going up which is never good for investors absolutely and is also.I think it’s irrespective of whether you look at different countries or different asset classes when you have the reference Market government bonds generating higher returns that this is a very relevant pull factor from all other asset classes and we’ve seen the turmoil.In public markets last year and we expect this to translate at some point also into effects in the private markets know this usually happens with the certain lag.Um we also see that now in the beginning of 2023.Public stock exchanges no valuation stock, valuations have gone up again so the the the picture is somewhat mixed and overall the we do expect that this difficult economic.Environment macro economically in terms of.

[20:16] Real economic activity but also the environment with increasing interest rates to fight.Inflation will translate into a difficult environment for the VC Market that positive.

[20:32] Developments or.I think factors that buffer potentially negative impacts.On the German Market.We had very very strong fundraising in the past few years and there is a lot of dry powder.In investment funds VC funds in Germany so that I think will will basically help.

[21:04] The the German VC market and actually leads me to be slightly on the optimistic.Side when it comes to to the development over the next in the medium term hmm.I see we are already talking a little bit about the current situation meaning the last publication I know it’s — you already before the interview little bit Bent Fork with a forecast and add vividly remember the the saying forecasts are always difficult especially concerning the future so let’s be a little bit here on the current situation because we found a lot of news just recently that the confidence.They used something like collapsed when referring to your cute for 2022 index and there you wrote.

[22:01] The business climate indicator for early stage segment nosedived 25.6 points to — 42.9 balance points with the expectation of the unprecedented coronavirus Chalk in the first quarter of 2020 the only recent time sentiment was worse.Twenty years ago I’m I’m an entrepreneur I’m a continuous Optimist I would say well.We’ve seen the bottom everything points at least a little bit upward and maybe we’ve seen the worst what if Ben your thoughts when you put this queue for 2022 together.

[22:41] All cumin do more it can only get better from here well I I think that we were ready to do think that the downward movement had come to a stop and Q3 to then see that that the development was going going down further at the same time I do think that with.Public markets.Becoming more positive at the beginning of 20–23 also with the the economic Outlook.

[23:26] Cheering up the.

[23:32] And and then a lot of dry powder in the market that there is a good chance that we will see an improvement, then in the sentiment and we also have to really see that we come out of a very difficult your last year now with the with the war of Russia and Ukraine we’ve certainly seen an extreme level of uncertainty I think the fourth quarter was, impacted still buy that by the negative numbers that came in from.From from business accounting and then also you had the.The challenge with with the crypto currencies I think that really dragged on investor sentiment worldwide.Um so.On top of the head there was a temporary stop to a public support program in Germany which now has restarted again but there were a lot of factors that pounded on sentiment in the fourth quarter so that.

[24:59] I think that it’s very likely that we see Improvement ahead of us.

[25:09] Would you refer to is the so-called invest grant that expired basically giving some public money on.

[25:19] Early stage Investments early stage business Angel Investments and that was basically.Cut and then we started early this year admittedly I do have a lot of business angels in my LinkedIn timeline and they totally don’t like the new setup but that is a completely different topic I totally understand you’re not responsible for that well and I think it’s important that there is support.

[25:46] Again though and I think it’s also a success that that the program we started and.That the temporary stop could basically be contained to a very short period of time.I think that was important hmm I see, when you would now make an Outlook which is say with the public markets going up there is a chance that the mood improves and for our audience who doesn’t have a finance background basically the public markets are important because it gives.Exit opportunity for the private investors and meaning the bad evaluation there on the public markets the Hyatt expectation of the investors they can realize such high multiples on the public market as well and basically cash in there with an IPO.Yeah I I think that that absolutely is as relevant no for for investors and that’s that’s also.

[26:52] What my expectation would be that we.We’ll see but then again know we are in a in an environment with this extreme uncertainty we’ve seen in the in the next last year how.How different factors impact on sentiment no and after all we.Are collecting on purpose a sentiment indicator, so I think it’s also fair to expect that in the environment in which we are which is still characterized by continued high risks know that we will see some up and down in the.In in in in the in the sentiment however I my expectation would be.In terms of a trend that we will see an improvement.Well if we hit an almost 20-year low I assumed it would be better to be going up and we will totally refer to the news publications of your index every quarter in our news and always refer to this interview thank you very much was total pleasure having you here as a guest.Yeah thank you very much yarn for the opportunity is a pleasure and I am happy of the analysis of.

[28:21] Investors sentiment in the German Market can be helpful for for others that are considering this Market.

[28:38] Music.


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