German government's Future Fund takes shape

The German government wants to invest 10 billion euros to support start-ups. Initial plans for the fund are now becoming public.

The planned Future Fund is finally taking shape. The German government is presenting its plans for the 10 billion euro investment pot. The sum will be split between two pillars.

Firstly, two new funds will be established. A new KfW Capital fund of funds will be endowed with one billion euros. This is intended to support start-ups in larger financing rounds so that they are no longer dependent on foreign investors in the future. Investments are made according to the waterfall model: the money is paid out to the start-ups via sub-funds. This minimizes the risk. The second fund is a deep-tech fund for pioneering technologies. Start-ups that deal with artificial intelligence or biotech, for example, are the main beneficiaries here - sectors in which it usually takes a long time to turn a profit.

The second pillar has been under discussion for some time and was already a topic in the Budget Committee in November: part of the money will flow into existing investment opportunities offered by the state, for example KfW, the European Investment Fund or the High-Tech Gründerfonds.

The German government's start-up commissioner Thomas Jarzombek (CDU) speaks of a "huge step forward". "This is the biggest ever in Europe." The money will be paid out over ten years from next year. Jarzombek hopes that another twenty billion euros will be added by private venture capital investors. This could increase Germany's total investment to 60 billion euros. The state money should not be distributed blindly. Jarzombek expects a high return of up to double digits. "We are earning money here for the taxpayer."