More investments – billions in commitments to finance start-ups – Politics

Berlin (dpa) – Companies have promised billions in support to finance young, innovative start-up companies. They want to invest around twelve billion euros in venture capital by 2030, as the federal government and the state development bank KfW announced at a start-up summit in Berlin.

A joint declaration of intent was signed with companies including Allianz, Commerzbank, Deutsche Bank and the US asset manager Blackrock as well as Deutsche Börse, Telekom and Henkel.

The statement says that the investments made so far and the improved framework conditions for start-ups are not sufficient compared to international standards.

Federal Chancellor Olaf Scholz (SPD) spoke of “really good news” for German start-ups and Germany as a business location. The initiative was intended to mobilize private investments in venture capital, start-ups and innovative technologies. Federal Finance Minister Christian Lindner (FDP) said: “Only if we succeed in mobilizing more private capital will we create additional growth.”

Lindner and Habeck harmoniously side by side

Lindner and Federal Minister of Economics Robert Habeck (Greens) sat close together on stage during a panel discussion, often with the same leg position. This caused many laughs in the audience when both ministers were seen on a large screen. “We should do this more often,” joked Lindner.

As key figures in the cabinet, the two ministers often have different opinions on important issues. It was only with difficulty that they and Scholz were able to agree on a government draft for the 2025 federal budget.

German start-up financing lags behind

“The venture capital market is far too small in international comparison,” said Lindner. In the USA it is three times as large in relation to the economy. Many German investors are holding back. This is another reason why the new initiative is so important. The head of the state development bank KfW, Stefan Wintels, said that 30 billion euros in venture capital per year would be needed to boost the USA. KfW is coordinating the new initiative.

Habeck said that Germany has a problem when it comes to financing the growth phase of start-ups. Politicians are now looking to join forces with the business world. Other companies could get involved. The next global company could come from Germany

Improve conditions

A comprehensive package of measures was announced to improve the framework conditions for growth and innovation capital. Start-ups and so-called scale-ups play an important role as innovation drivers in the German economy, it was said. However, these companies need sufficient financing and sustainable structures in order to grow into competitive companies.

The president of the digital association Bitkom, Ralf Wintergerst, said the initiative would facilitate and improve financing for many German start-ups. Young tech companies in Germany could grow faster and strengthen the technology and innovation location.

The startup association recently called for a tripling of so-called venture capital investments by 2030 in order to close an annual financing gap of around 30 billion euros in Germany. To do this, it is necessary to mobilize more private capital for venture capital, especially from institutional investors such as insurance companies. Numerous IPOs of young companies outside of Europe lead to a considerable loss of added value for Germany as a business location.

© dpa-infocom, dpa:240917-930-235368/2