Around 900 participants met yesterday at the Startup Summit 2024 in Berlin, including political decision-makers, entrepreneurs and investors. They discussed how to strengthen Germany’s innovative power and implemented a new part of the German government’s startup strategy with the WIN initiative. The figures for the German start-up scene are promising: 1,384 start-ups were founded in Germany in the first half of 2024 – 15 per cent more than in the second half of 2023.
WIN initiative presented
Yesterday evening, Federal Chancellor Olaf Scholz, Economics Minister Robert Habeck and Finance Minister Christian Lindner announced at the German government’s Startup Summit that 12 billion euros of institutional capital (including from Deutsche Bank, Allianz, Deutsche Telekom and many more) had been mobilised for Germany as a location for innovation as part of the WIN initiative. Under the leadership of KfW and its CEO Stefan B. Wintels, and are intended to take the growth financing of start-ups and especially deep-tech start-ups in this country to a new level.
Overcoming risk aversion: Habeck’s vision for mobilising private capital for start-ups
In his opening speech, Economics Minister Robert Habeck emphasised the need to overcome ‘risk aversion’ in Germany. The involvement of public and private investors emphasises this claim. The approach is clear: more private venture capital should be mobilised in order to unleash the creative and economic potential of our start-ups. The Minister emphasised that 80 percent of the planned measures have already been implemented, including initiatives to improve venture capital financing for start-ups. The newly presented WIN initiative is intended to further improve financing conditions. Nevertheless, Habeck, like Mario Draghi and the BDI, still sees a need for massive investment, comprehensive reforms and a strengthening of resilience. He emphasises the need for good framework conditions, less bureaucracy, increased networking, matchmaking and internationalisation in order to promote growth and position Germany internationally as a startup location.
Financing gap: Verena Pausder warns and sees potential
Verena Pausder, Chairwoman of the Startup Association, emphasised that capital is indispensable as fuel for startups and scaleups. Despite many efforts in recent years, there is still a financing gap in Germany, especially in the growth phase. In order to close this gap, it is necessary to mobilise more private capital, especially from institutional investors. The newly introduced WIN initiative is aimed precisely at this problem and represents an important step in the right direction. Pausder emphasised that this initiative has the potential to become a real game changer, similar to the French Tibi initiative. Only through such measures could Germany strengthen its innovative power and secure its future prosperity. In her opinion, the WIN initiative should be the prelude to a comprehensive financing offensive.
Growth and innovation capital are important keys to economic dynamism. The annual deal volume on the German market has more than quadrupled in the past 10 years, from 1.5 billion euros in 2013 with an interim record high of 18.6 billion euros in 2021 to 7.1 billion euros in 2023. This development is thanks to a variety of measures by the German government, associations and companies, such as the ‘Future Fund’. The Future Financing Act also came into force in 2023.
The success of the German startup strategy
The German government’s startup strategy contains 130 measures that significantly improve the framework conditions for young and innovative companies in Germany. These include measures in areas such as talent acquisition, financing, access to data and public contracts.
As the Minister of Economic Affairs emphasised at the outset, over 80 percent of the measures have already been implemented according to the Federal Government’s second progress report. Progress has been made above all in the important area of financing: the German Growth Fund is one of the largest venture capital funds of funds in Europe with a target volume of one billion euros, which was already reached in autumn 2023. In addition, the new high-tech start-up fund Opportunity has been providing additional growth capital since June.
Germany has made a name for itself with 31 billion-euro companies, the so-called unicorns. Over 1,384 start-ups were founded in the first half of 2024 alone, and employment figures in this sector are growing steadily.
The Startup Factories lighthouse competition has also picked up speed: To make it easier for ideas from universities to become business ideas, the BMWK is currently supporting selected projects in the development of detailed concepts.
Ten new de:hubs strengthen cooperation between startups and established businesses
Cooperation between start-ups and the established economy is of great importance. The BMWK initiative ‘de:hub’, which is now being further expanded, creates important spaces for encounters and cooperation. The new hubs will be presented at the summit. The de:hub initiative is being expanded by ten locations, meaning that there will now be a total of 25 hubs in all federal states. New subject areas will be added, such as security and defence. The hubs will give start-ups the opportunity to find suitable partners. This enables them to gain new customers and offer established companies customised innovations. Further information on the de:hub can be found here.
Sustainability as a driver of innovation
Another focus of the summit was on the sustainable orientation of many German start-ups. Almost a third of all new companies in 2023 fell into the green economy category, with innovative approaches in areas such as renewable energies and sustainable technologies. For example, for rental solar systems, collection services for used glass with sustainable disposal or satellite-assisted irrigation in agriculture. In 2023, the German government provided 1.5 billion euros in funding for sustainable start-ups in the fields of climate, green and clean tech.
Conclusion
The Startup Summit 2024 in Berlin marked a significant moment for the German startup scene. With the WIN initiative and other strategic measures, Germany is positioning itself as a leading centre for innovation and entrepreneurial growth in Europe. The combination of capital, creativity and political will shows that Germany is ready to take its startup landscape to the next level and establish itself as a global leader in innovation. Our Startup-Port network is playing its part in the Hamburg metropolitan region.
The most important things in a nutshell:
- The WIN initiative is really good news for our start-ups and for Germany as a business location. It aims to mobilise private investment in venture capital (money invested in newly founded companies), start-ups and innovation technologies.
- Growth financing is of crucial importance for Germany’s and Europe’s innovative strength. Especially in times of shifting geopolitical power relations, strengthening our competitiveness and technological sovereignty is of central importance. In particular, young and dynamic companies are relied upon as drivers of innovation.
- The Federal Government has continuously improved the framework conditions for start-ups in Germany in recent years, including through the rapidly developed start-up strategy, which was adopted in summer 2022. Around 80 percent of the 130 measures have now been implemented and are already helping startups in a very concrete way, from new funding programmes and advice to practical laws, talent recruitment, diversity and the strengthening of founders to spin-offs from science and real-world laboratories.
Supplementary news:
Future Fund: First evaluation of the package of measures for start-ups
Supplementary sources:
Start-up strategy of the federal government
Second progress report on the implementation of the federal government’s startup strategy
