The German government has earmarked a further €200m for venture capital (VC) investments through the new Impact Facility of the Zukunftsfonds (Future Fund).

The capital, available by 2030, is invested by KfW Capital, the VC arm of the state-owned development bank, together with private co-investors to fund start-ups generating a positive impact on the environment and society.

With the Impact Facility, the current minority government, supported in Parliament (Bundestag) by the Social Democratic Party (SPD) and the Greens, is continuing to implement the start-up strategy drafted in 2022, the cabinet said in a statement.

KfW Capital has today launched the Impact Facility, a new building block of the Future Fund, to strengthen impact investing in the German venture capital market, it added.

The government has decided to add a further building block to the Future Fund as impact investing is becoming increasingly important in the venture capital market, it continued.

The Future Fund’s Impact Facility aims to mobilise an increasing amount of private capital, giving impact-oriented start-ups better access to venture capital.

Germany is trying to mobilise capital to invest in start-ups from institutional investors and pension funds through the WIN-Initiative.

So far, investors including pension funds for professionals (Versorgungswerke) have committed €12bn to the initiative.

The German Startup Association (Startup Verband) has called for the expansion of the scope of the WIN-Initiative in the next legislative period, with more capital for start-up investments and growth raised through insurance companies, Pensionskassen and pension funds for professionals, in an eight-point plan laid out for the next government.

The next government has the responsibility to extend the lifespan of the Future Fund beyond 2030, the association added.

Germany plans to set up a second Growth Fund – Wachstumsfonds II – by 2026, to open another vehicle for Pensionsfonds and Pensionskassen that want to invest in start-ups.

Startup Verband, together with its French counterpart France Digitale, and the European Start-up Network, have also called for a pan-European programme to mobilise institutional capital from insurance companies and pension funds to finance growth-stage AI companies developing transformative technologies.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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