KfW Capital has begun raising €1bn for its Growth Fund II (Wachstumsfonds II) aimed at institutional investors in Germany and abroad, including pension funds, to support European start-ups.
The fund is anchored by €200m from KfW Capital and €120m from the German government.
It offers investors “broadly diversified access” to European start-ups through venture capital funds and direct co-investments in around 1,000 tech companies across different sectors, according to a joint statement from KfW Capital and the German Federal Ministry for Economic Affairs and Energy.
Growth Fund II will invest in established venture capital fund managers with proven track records, as well as in venture debt funds, co-investments, and secondaries. Its regional strategy focuses on Germany and Europe.
As a fund of funds, it provides vehicles suitable for different investor groups, primarily targeting later-stage investments.
Like Growth Fund I, launched in 2023, Wachstumsfonds II is aimed at institutional investors, insurers, asset managers, foundations, and family offices, domestically and abroad, to match government and KfW Capital commitments.
Growth Fund I raised €1bn, committing roughly €870m to 43 target funds. Its final closing included Allianz, BlackRock, Generali Deutschland, Debeka, Stuttgarter Lebensversicherung, and pension funds for professionals (Versorgungswerke).
Stefan Wintels, chief executive officer of the KfW Group and chair of the supervisory board of KfW Capital, said the second-generation fund is an important boost for the European venture capital ecosystem.
Jörg Goschin, chair of the management board of KfW Capital, highlighted that European VC has performed “very well” as an asset class, outperforming other regions, including the US, in profitability.
“Based on my discussions both domestically and internationally, I can see a strong interest in this asset class and the launch of fundraising for the Growth Fund II,” he said.
