Billions for startups: Federal government and EU want to create tech champions

Germany and Europe are shifting into a higher gear in promoting their technological future. With a noticeable increase in funds, the Federal Ministry for Economic Affairs (BMWi) and the European Investment Fund (EIF) are joining forces to send a signal to the venture capital market. An additional sum of 1.6 billion euros will flow into the new joint program line "EIF German Equity", announced the ministry of Minister Katherina Reiche (CDU) on Tuesday.

The expanded financial pot is intended to place the now two-decade-long partnership between BMWi and EIF on a new foundation. According to the ministry, this makes over ten billion euros in funding available. The money is to be used to establish Germany as a leading location for venture capital in Europe and to bridge the gap between "excellent" research and marketable scaling.

Another goal: Promising ideas should no longer migrate to the USA or Asia due to a lack of follow-up financing. Instead, Germany should also be enabled to produce more "international technology leaders".

Further Booster for Deep Tech

A wide range of technologies are to be supported. Whether Artificial Intelligence (AI), FinTech, Life Sciences or industrial innovations in production: the funding is industry-open. Most recently, the federal government also launched the Deutschlandfonds with 30 billion euros of public funds, which is intended to mobilize a total of 130 billion euros.

The funding is intended to additionally mobilize private capital. The EIF, as an experienced anchor investor, is expected to act as a seal of quality for institutional investors, according to hopes. In the past, according to the BMWi, every public euro has sometimes attracted five times the amount of private funds. This leverage effect creates a robust financing architecture that supports startups from the first financing round to international growth.

DeepL, N26 & Co. as Role Models

Parliamentary State Secretary for Economic Affairs Gitta Connemann (CDU) underscores the strategic importance of the initiative for the independence of the location. It is about investing in future-oriented projects. Young founders need planning security. Nicola Beer, Vice-President of the European Investment Bank behind the EIF, sees the cooperation as a crucial building block for Europe's strategic autonomy. The integration of national programs with European platforms, such as the "European Tech Champions" initiative creates a continuous funding landscape that strengthens the continent in global competition.

The fact that this model can work is demonstrated by looking back. Since the start of the cooperation in 2004, the partners have invested in over 6000 company financings. Prominent names such as DeepL, Flix, GetYourGuide, Personio, or Trade Republic are success stories that would hardly have been conceivable in this form without perseverance and stable fund structures. With "EIF German Equity", this tradition is now being continued under the umbrella of the pan-European innovation strategy TechEU.

(wpl)