Start-ups call for reforms: «Strengthen innovation»

The startup sector in Germany has grown, but many hurdles remain – and a financial gap of 30 billion euros. The startup association is now calling on politicians to take a series of measures.

Berlin (dpa) – More money for founders, more IPOs in Germany, public contracts for growth companies: The startup association is calling on the federal government to take a package of measures to strengthen Germany as a location for startups. This is the result of a paper that will be presented in Berlin on Monday and has been made available to the dpa news agency.

“With top international research, outstanding talent, a strong industrial base and enough private capital, Germany has all the ingredients to be successful globally,” said Verena Pausder, chairwoman of the startup association. But the innovative power must be strengthened.

Mobilize venture capital from major investors

In its “Innovation Agenda 2030”, the association is calling, among other things, for a financing offensive for German start-ups, which, compared to other countries, have relatively little access to large sums of money from investors. Venture capital investments would have to triple by 2030 in order to close the annual financing gap of around 30 billion euros in this country. This requires more private capital – especially from large investors such as insurance companies. However, it is subject to stricter investment regulations, which limits the participation of venture capital in start-ups.

Public contracts for start-ups

The startup association also sees potential in public procurement. “Five percent of public contracts should be awarded to startups by the end of the decade,” demands Pausder. This costs the state nothing, but promotes digitization and innovative startups. Small and medium-sized businesses also need to be better networked with startups that focus on new technologies. Growth companies are particularly important in decarbonizing the economy. According to the association, the proportion of startups in Germany that focus on climate protection with their innovations is just under 30 percent.

It is also important to strengthen the capital market to make it easier for investors to profitably emerge from start-ups. “Strong exit channels are particularly important to enable more IPOs in Germany and Europe,” it said. Since successful start-ups – including the Mainz-based company Biontech – often go public in the USA, the association warns of a “significant loss of added value” for Germany.

Setbacks for the start-up industry

The largest start-up sector has grown in recent years. The number of companies with billion-dollar valuations has quickly quintupled to 33 since 2018, according to the start-up association, including the online bank N26, the translation service DeepL and the long-distance bus operator Flix. But with the rise in interest rates, start-ups have found it harder to get money in recent years, and some companies have slipped into crisis. In the first half of the year, the consulting firm EY at least saw an upward trend in financing.

topicnews · September 9, 2024

Start-ups call for reforms: «Strengthen innovation» – Economy

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