Germany’s private markets have hit pause in Q3 2025 as venture capital investment cooled following several quarters of “renewed optimism.” This, according to an update from PitchBook which also noted that the slowdown marked somewhat of a reset for the European nation’s startup ecosystem, though key deals from Insurtech wefox and Sdui Group showed that high-potential companies are able to secure capital.
The research report from PitchBook also mentioned that private equity activity remained steady, with investors focusing on sectors closely tied to the AI infrastructure boom. Public markets continued to thrive—the DAX 40 delivered impressive gains, reportedly led by industrials and utilities.
On the macroeconomic front, momentum stayed a bit uneven, with relatively modest GDP contraction and sticky inflation tempering confidence. But long-term policy shifts, like new incentives for younger Germans to invest, signal interest in expanding participation in public as well as private markets.
The report further noted that investment in German VC-backed companies reached “€1.1 billion across 177 deals in Q3 2025.”
It pointed out that Q3 deal value and count marked the “lowest single-quarter totals from the past five years.”
Momentum had been building in the German ecosystem, with deal value increasing “between Q4 2024 and Q2 2025, but the latest quarter marks a severe dip in investment rates.”
Insurance comparison startup wefox “completed the largest Q3 round at €151 million.”
Another notable deal involved education platform Sdui Group securing €95 million “at a €380 million post-money valuation, nearly quadruple its valuation from 2023.”
The report added that VC exit value hit €1.4 billion across 21 exits, which is relatively “flat compared with recent quarters.” A considerable chunk of value was generated from the “€815.1 million acquisition of conversational AI tool Cognigy by NiCE.”
The report from PitchBook further noted that the exit highlights how the AI space continues to underpin activity within private markets, “particularly VC. Capital raised by VC funds landed at €1.7 billion across 16 funds.”
The research report added that despite uncertainty surrounding capital availability for fundraising due “to compressed exit rates, Germany VC AUM and dry powder are moving upwards.” The update concluded that as of 31 March 2025, AUM sat “at €42 billion and dry powder was at €9.2 billion.”
