Federal government expands access to capital for start-ups by 1.75 billion euros

With a focus on future technologies such as artificial intelligence and biotechnology, the German government intends to strengthen Germany as a business location.

Berlin - The German government is focusing on strengthening young technology companies and increasing access to capital for innovative start-ups. To this end, 1.6 billion euros from the Future Fund and 150 million euros from the ERP Special Fund are to be made available. The funding amount is aimed at technology areas such as artificial intelligence, climate, quantum and biotechnology in order to drive forward the development of innovations.

The funds will be used to support start-ups and increase exit opportunities for German and European companies. The German government also plans to intensify existing cooperation with institutional investors and support young start-ups in impact investing.

There is no shortage of clever entrepreneurs with forward-looking ideas in Germany.

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

Parliamentary State Secretary at the Federal Ministry of Finance, Dr. Florian Toncar, emphasizes the importance of private capital for Germany as a business location. He emphasizes that the majority of investments made in Germany are made privately and calls for an increase in the attractiveness of the business location by reducing bureaucracy and speeding up planning and approval procedures.

We want to use the Future Fund to help young companies in Germany to establish themselves on the global market.

Dr. Robert Habeck, Federal Minister for Economic Affairs and Energy

Federal Minister for Economic Affairs and Climate Protection, Dr. Robert Habeck, explains that the resources from the Future Fund will be used to support innovative start-ups in future technologies. The aim is to help young companies to establish themselves on the global market and to strengthen Germany as a location for innovation and start-ups. Habeck emphasizes the leverage effect of the investments, which are intended to mobilize at least the same amount of private funds so that a total of at least 3.5 billion euros is available for investments in the German venture capital market.

The planned use of funds

The planned use of the funds provides for 850 million euros to be used together with private venture capital funds for direct investments in young start-ups. In addition, up to 500 million euros are earmarked as a German contribution to strengthening the exit financing of European tech champions. The establishment of a European exit initiative is planned in order to ensure that successful German and European start-ups do not have to switch to non-European markets for exits.

A further 200 million euros are to be made available for the successful German Growth Fund in order to consolidate the model and mobilize further capital from institutional investors. In addition, EUR 200 million is earmarked for investments by KfW Capital in impact venture capital funds that aim to achieve a measurable positive, social or ecological impact and provide targeted support for the impact investing segment.

Start-up association takes a stand

We need to create the conditions for global tech champions "made in Germany".

Christoph Stresing, Managing Director of the Startup Association

Christoph Stresing, Managing Director of the Startup Association, welcomes the further development of the Future Fund as a key driver for the German venture capital market. The increase of 150 million euros and the focus on artificial intelligence, climate, quantum and biotechnology are praised. Stresing emphasizes the urgency of capital for start-ups and calls for the creation of foundations for leading tech companies in Germany. Despite positive measures, he warns of continued weakness in startup funding compared to other European locations and urges that efforts be stepped up to maintain innovation relevance.

The design and development of the products is now beginning and the gradual introduction of the measures is planned for the end of 2024. The Future Fund launched in 2021 with a volume of 10 billion euros will help to sustainably strengthen the venture capital market and the financing conditions for innovative start-ups and mobilize private capital for investments in future technologies.