The German federal government is providing an additional €10 billion for an equity fund for technologies of the future (Zukunftsfonds, or “Future Fund”). The fund will primarily benefit start-ups in the growth phase with high capital requirements. Today, Federal Minister of Finance Olaf Scholz and Federal Minister for Economic Affairs Peter Altmaier have tasked KfW with the execution and administration of the Zukunftsfonds.
“The federal government alone will invest €10 billion in the Zukunftsfonds. Together with further private and public partners, we will mobilise at least €30 billion in venture capital for start-ups in Germany. Combined with our existing financial instruments, we will be able to provide over €50 billion in venture capital for start-ups in the next few years, together with private investors. This is unique in Europe and is also a significant contribution by international comparison.”Federal Minister for Economic Affairs Peter Altmaier
“We are ensuring that Germany will be at the forefront of innovation and investment. This is the right path as investments in start-ups strengthen the future viability of our country. I therefore believe it is critical for us to provide powerful assistance to start-ups from the founding phase through to their transition to a viable business model. With the strategy we have set forth today for the Zukunftsfonds, we have laid the foundation for bolstering the German venture capital market and thus supporting an increasingly important pillar of our prosperity.”Federal Minister of Finance Olaf Scholz
“The Zukunftsfonds will offer innovative technology companies better access to capital, particularly for growth finan-cing. We are committing over €2 billion of our own funds, and our investment subsidiary KfW Capital will coordinate the individual product building blocks for the federal government.”KfW Chief Executive Officer Dr Günther Bräunig
The Zukunftsfonds will combine various measures (“building blocks”) to promote technologies of the future. Its first building blocks will start in mid-April. Within KfW Group, KfW Capital is responsible for coordinating the Zukunftsfonds.
KfW Capital expansion
KfW Capital is increasing the commitment volume for venture capital funds, growth funds and venture debt funds by around €2.5 billion in the next ten years with support from the ERP Special Fund and the Zukunftsfonds. This expands KfW Capital’s investment focus on growth financing for start-ups in particular. KfW Capital’s investments will generally continue to be made under the same conditions as investments made by private-sector co-investors (pari passu).
EIF Growth Facility
Building on the existing ERP-EIF Growth Facility, a growth facility with a volume of up to €3.5 billion is being created which invests in growth funds and growth financing rounds for start-ups. The investment is generally made under the same conditions as an investment made by private-sector co-investors (pari passu).
Deep Tech Future Fund
The Deep Tech Future Fund, which is growing to a volume of up to €1 billion, is directly investing in deep tech companies on a pari passu basis with a long-term investment perspective. Deep tech companies develop innovative scientific breakthroughs with significant macroeconomic impact potential. Development through to market readiness is very time- and capital-intensive. The intent of the new Deep Tech Future Fund is to help these types of technologies in Germany reach market maturity.