Federal government and KfW initiate "RegioInnoGrowth" to support start-ups and SMEs

Federal government & KfW set impulse for innovation: With 'RegioInnoGrowth', start-ups & SMEs receive EUR 450 million through regional adaptation & partnership with state promotional institutions.

Berlin - In a step towards promoting innovation and growth in the German economy, the federal government and KfW signed an agreement for "RegioInnoGrowth" on August 14, 2023. This new component of the Future Fund aims to strengthen start-ups and SMEs with equity and similar financing options.

By providing up to EUR 450 million from the Future Fund and the ERP Special Fund, RegioInnoGrowth enables targeted support for start-ups and SMEs that often have limited access to traditional venture capital financing.

Through close cooperation with the state development institutions, a regional and customized refinancing option is to be created. Companies have the opportunity to receive up to EUR 5 million, which can be provided as mezzanine capital or subordinated loans.

With RegioInnoGrowth, we are specifically promoting the innovation potential of start-ups and SMEs, which often find it difficult to access venture capital. This underlines the implementation of our start-up strategy.

Sven Giegold, State Secretary Federal Ministry for Economic Affairs and Climate Protection

The cooperation between KfW and the state promotional institutions enables financing options to be individually tailored to the needs of the companies. This approach combines KfW's specialist knowledge in refinancing and structuring with the regional expertise of the state promotional institutions.

With RegioInnoGrowth, the federal government and KfW are providing targeted support to start-ups and SMEs, which are often not the focus of conventional venture capital funds."

Dr. Florian Toncar, Parliamentary State Secretary of the Federal Ministry of Finance

RegioInnoGrowth builds on the success of Pillar II of the coronavirus aid package for start-ups and SMEs, which facilitated over 1,800 financing transactions with a KfW/federal share of around EUR 600 million.

The conclusion of the agreement between the federal government and KfW lays the foundation for the introduction of RegioInnoGrowth in Germany. The development of corresponding promotional products is now being actively pursued in the federal states in order to establish a regional offer for RegioInnoGrowth in the near future. KfW and the state promotional institutions will provide information on progress in due course.

This step underlines the federal government's commitment to strengthening innovation potential in the country and creating a wide range of financing options for start-ups and SMEs. The combination of state support and private involvement is intended to help promote innovation and growth in the German economy.