€1.6 billion for innovation: Economic Affairs Ministry and EIF expand finance for startups in EIF German Equity

The Federal Ministry for Economic Affairs and Energy (BMWE) and the European Investment Fund (EIF) are pooling their resources to provide technology-based startups with an additional €1.6 billion in support. The aim is to strengthen the equity base of young technology companies and to significantly improve access to professional venture capital and growth funds.

The partnership reaches back to 2004, and is now being expanded further by the new “EIF German Equity” programme line. The mandate is sector-neutral and thus covers forward-looking technologies like artificial intelligence, data-driven applications, FinTech, digitisation and industrial innovation, through to energy, manufacturing and life science technologies. This will enable Germany to turn more excellent innovations into scalable business models and international technology leaders.

Supplemented by existing joint growth and scaleup programmes run by the Federal Government and the EIF, a programme portfolio of over €10 billion is emerging (incl. the German contribution to the European Tech Champions Initiative, covering all the phases of a company’s life. People starting up businesses gain more reliable access to private capital, whilst institutional investors find a strong public-sector anchor which sets governance and ESG standards and leverages private growth capital.

Gitta Connemann, Parliamentary State Secretary in the Federal Ministry for Economic Affairs and Energy: “We are investing where the future is happening: in young tech companies. Together with the European Investment Fund, we are providing €1.6 billion for this. The money will have an impact, because we are investing in tandem with private capital providers and thus leveraging additional private capital. We are strengthening the equity base. We are opening up better access to professional venture capital and growth funds. And we are giving new fund managers an opportunity. This leads to viable business models. And innovations thus grow into businesses. In this way, we are creating tomorrow’s technology leaders – here in Europe. In combination with our existing growth and scaleup initiatives, this means we have a seamless financing concept. It closes gaps. It provides a secure basis for founders. And it ensures that good ideas do not migrate abroad, but grow up here

Nicola Beer, Vice-President of the European Investment Bank (EIB): “EIF German Equity shows how European partnership works: together with Germany, we are expanding one of Europe’s most successful equity programmes. In tandem with instruments like the European Tech Champions

Initiative, a coordinated funding architecture is emerging, from the first VC ticket to growth financing. Access to equity capital is crucial for Europe’s strategic sovereignty – and this mandate aims to deliver this.”

Merete Clausen, Deputy Chief Executive of the European Investment Fund (EIF): “Since 2004, the cooperation with the Economic Affairs Ministry has shown how effective capital is when it is willing to take risks. The cooperation has created new management teams, attracted high-grade VC funds to Germany, and reached thousands of tech companies. The expansion of the programme is building on this, and is in particular strengthening deeptech, life sciences and energy and industrial technologies – areas which are particularly reliant on efficient fund structures and European scaling possibilities.”

Continuation of a success story

EIF German Equity renews and expands the tried-and-trusted cooperation on the basis of the ERP Special Fund and of the EIF’s own resources. This measure is a central element of German innovation policy, which is targeted at spin-offs, high-tech startups and future SMEs on a technology-neutral, market-driven and growth-oriented basis.

Since 2004, around 290 fund investments with a total volume of approximately €49 billion have been made, enabling more than 6,000 company financings to date. Support has successfully helped companies like DeepL, GetYourGuide, N26, Personio, Trade Republic, Flix and Home24 – examples of the impact of German and European fund programmes.

Focus on innovation

As a fund of funds, EIF German Equity invests in VC and growth funds with a focus on Germany, supplemented by European funds which offer clear added value for the country. The focus of the existing and future investments is in line with the market development of ICT, life sciences, energy-related innovations, deeptech and other converging forward-looking technologies.

The mobilisation of private capital is a central goal: the participation of the EIF sends out a quality signal and generally activates a multiple of the public finance – in many cases around five times as much.

Impact on startups, scaleups and the VC ecosystem

Innovative companies benefit from improved access to capital, a larger number of active fund managers, and better scaling perspectives. As a long-term anchor investor, the EIF sets high standards for governance, transparency and ESG, and thus boosts the quality and stability of the market.

The entire startup and VC ecosystem benefits from a reliable public partner which mobilises private capital, attracts international investors, and supports the development of an efficient, diversified fund manager spectrum. In this way, EIF German Equity will make a key contribution to positioning Germany as a leading and competitive VC hub in Europe.

TechEU: National strength plus European leverage

EIF German Equity pays into TechEU, the pan-European innovation strategy of the EIF and the EIB. The funding of early-phase innovations in Germany and the dovetailing with European platforms like the European Tech Champions Initiative (ECTI) generates clear European added value:

National programmes create the innovation pipeline, EU initiatives develop the growth capital for Europe’s future tech champions. This two-stage approach closes funding gaps, boosts Europe’s technological sovereignty, and combines national innovation targets with the European aim to progress deeptech and forward-looking technologies on a large scale.