Scale-up Direct (Germany Fund)

“Scale-up Direct” is part of the Deutschlandfonds and enables KfW Capital portfolio GPs to make direct investments in high-growth tech start-ups from their own portfolios. Around one billion euros will be available from this programme by 2030.

Summary of key details:
- KfW Capital invests as a co-investor alongside VC fund managers in innovative start-ups and young technology companies that have their headquarters, a permanent establishment, or the focus of their business activities in Germany and are looking to raise growth capital.
- KfW Capital typically invests from the Series B funding round onwards, with investments ranging from €10 million to €50 million per start-up, on a pari passu basis with the co-investing portfolio GP.
- Co-investments are made through a special purpose vehicle (SPV) set up and managed by the co-investing portfolio general partner.
- When it comes to due diligence, the structure of the funding round is just as crucial as the commercial validation of the investment. Funding rounds are eligible for financing if they have an external lead investor who sets the valuation.
- Co-investments are always made in cooperation with KfW Capital's portfolio fund managers in selected start-ups. It is not possible for start-ups to contact KfW Capital directly.

Further information can be found here

Further information on the Deutschlandsfonds can be found at: Federal Ministry of Economic Affairs and Energy - Germany Fund and Federal Ministry of Finance - Germany Fund.

Quantum Systems receives first investment commitment from the new Scale-up Direct program

The dual-use start-up Quantum Systems, based in Gilching near Munich, received its first investment commitment in mid-December from KfW Capital's ‘Scale-up Direkt’ programme in collaboration with HV Capital.

Dr Jörg Goschin, CEO of KfW Capital

"With the launch of the Scale-Up Direct programme as part of the Germany Fund, KfW Capital now has the opportunity for the first time to invest directly in start-ups together with private fund managers from the portfolio. The programme is designed to provide targeted support to innovative technology companies that have the potential to grow significantly, both economically and technologically, thereby strengthening Europe's competitiveness in the long term. A total of €1 billion is available for this purpose until 2030. Together with HV Capital, we have now completed our first deal with our investment in Quantum Systems. Quantum Systems, a dual-use drone start-up, fits exactly the profile we are looking for: a fast-growing company that operates in a technology sector that is particularly important and future-oriented for Germany and impresses with its high level of innovation. We would like to thank our partner HV Capital for the successful collaboration."

Dr Christian Saller, General Partner bei HV Capital und Board Member bei Quantum Systems

"Germany is now well positioned in terms of early-stage financing, but there is often still a lack of European growth capital for true global scaling. KfW Capital's scale-up programme is a crucial lever for closing this gap and building “global champions” from Germany. We at HV Capital are delighted to be accompanying the launch of this important initiative with the programme's first investment."

Sven Kruck, Co-CEO of Quantum Systems

“The Germany Fund sends out an important industrial policy signal: Germany wants to take the lead in future-facing technologies again. For Quantum Systems, Scale-up Direct – together with KfW Capital and HV Capital –is a key growth engine. The financing gives us the capacity to continue ramping up production, automation and AI-based mission systems in Germany. In this way, the programme not only strengthens the country as a location but, in very practical terms, speeds up our ability to deliver European security and future-facing technologies on an industrial scale.”