The Federal Government aims to expand access to capital for young, innovative technology companies. This will provide even more funding for tech startups working in areas such as artificial intelligence, climate, quantum, or biotechnology. Furthermore, the government intends to deepen existing collaborations with institutional investors and support young startups in impact investing. The German government is providing €1.6 billion for this purpose from the Future Fund and 150 million euros from the ERP special fund.
This is how the funds should be invested:
- KfW Capital, together with private venture capital funds, will invest €850 million in direct investments in young tech startups. These companies will receive support on their capital-intensive growth path to assert themselves on the global market and prepare Germany for the future.
- Up to 500 million euros are earmarked as a German contribution to strengthening exit financing for European tech champions. Together with European partners, the plan is to establish a European Exit Initiative. This will lay the foundation for ensuring that successful German and European startups do not have to resort to non-European markets for exits.
- KfW Capital will provide €200 million for the continuation of the successfully launched Growth Fund Germany. The goal is to consolidate the Growth Fund's successful model and mobilize additional capital from institutional investors.
- EUR 200 million is earmarked for KfW Capital investments in impact venture capital funds that aim to achieve a measurable positive social or environmental impact in addition to financial returns.
The design and development of the individual products has already begun. The gradual introduction of the products is expected to begin at the end of 2024.
Establishing tech startups on the global market
The Federal Minister for Economic Affairs and Climate Protection Robert Habeck commented:
"We can now provide even better support to innovative startups investing in future technologies. With resources from the Future Fund, we want to help young companies in Germany establish themselves on the global market. In doing so, we are strengthening Germany as a center of innovation and startups, as well as future technologies such as artificial intelligence. With our investments, we are leveraging additional private capital: the €1.75 billion in public funds we are investing will be supplemented by at least the same amount of private funds. This means that we are talking about a total volume of at least €3.5 billion in public and private funds that will be available for additional investments in the German venture capital market."
