Germany is known as an industrial powerhouse but it is also increasingly becoming a leader in start-ups and high-tech companies. A recent announcement in Berlin delivered more good news for these companies with an extra billion euros being allocated to two of Germany’s main venture capital instruments: the ERP/EIF umbrella fund and the European Angels Fund. The amount of funding available via these two instruments moves from €2.7bn to approximately €3.2 billion for companies with fast growth trajectories.
The announcement follows a recent evaluation of Germany’s three-year ‘INVEST – Subsidy for Venture Capital’ programme by the European Economic Research Centre. They reported that the programme had achieved its goal of increased private venture capital and better access to venture capital for start-ups.
Sigmar Gabriel, the German Minister for Economics and Energy, commented:
“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.”
More and more start-ups and fintech firms are looking to move to Berlin, and these recent announcements will provide some encouragement for firms and investors.
In the INVEST programme, for example, business angels receive 20 per cent of their investment returned tax-free if they invest more than 10,000 euros, and for each €1,50 invested, the fund adds another Euro of investment.
Photo credit: “www.colourbox.com”. Material used in the preparation of this article has been drawn from Germany Trade & Investment (GTAI).