The German Economic Affairs Ministry and European Investment Fund will provide a 1 billion euro increase in start-up funding for innovative firms.
The extra billion euros in funding will be made available to two successful venture capital instruments: the ERP/EIF Fund of Funds and the European Angels Fund. The European Investment Fund and the ERP Special Fund–represented by the German Federal Ministry for Economic Affairs and Energy–have topped up the highly popular start-up funding programmes by a billion euros to €2.7 billion. Combined with funding under the Growth Facility launched in March, approximately €3.2 billion is now available to support German start-ups and high-tech companies with fast growth trajectories.
Federal Minister Sigmar Gabriel said:
“We need more young, innovative technological companies in Germany. In an increasingly digitalised world, these companies are the driving force for innovation, modernisation of the economic structure and a catalyst for employment. In order to set the stage for a dynamic start-up ecosystem, facilitating access to Venture Capital is the key. This is a top priority for Germany. The €1 billion increase of these well-functioning financing instruments brings us another step closer to our goal of initiating a new era of start-ups in Germany.”
Since its launch in 2004, the ERP/EIF Fund of Funds has played an important role in start-up funding. It participates in venture capital funds which invest in technology firms in the early and growth phase.
The European Angels Fund, which is also financed with money from the ERP/EIF facility, complements this with co-financing for investments by selected, experienced business angels. These funding services have been supplemented since March by the ERP/EIF Growth Facility, which covers the growth-phase segment.
Together with the funding for the Growth Facility, the total volume of these three venture capital instruments will be €3.2 billion. Since the investments always involve other private co-investors, they generate considerable leverage.
Photo credit: “www.colourbox.com”. Material used in the preparation of this article has been drawn from The Federal Ministry for Economic Affairs and Energy (BMWI).