Austria's fund-of-funds for start-ups slated to launch in early 2027

Background: Investment slump since 2022

With the fund-of-funds, the government wants to counter this trend. The fund is intended to serve as an overarching vehicle that collects capital from private and institutional investors and channels it to underlying funds, which in turn invest directly in start-ups. The aim is to spread the risk for individual investors and improve the financing situation for founders.

For Start-up State Secretary Elisabeth Zehetner, the planned fund-of-funds is a key instrument for strengthening Austria as a location for innovation. She pointed out that young companies in particular rely on stable sources of financing to be able to implement their growth plans. The fund-of-funds is intended to help close the gap created by the decline in investments.

How the fund-of-funds works

Established domestic success stories such as GoStudent are also seen as an example of the importance that a functioning start-up funding system can have. The industry hopes that the fund-of-funds will not only enable new financing rounds but also draw international investors' attention back to the Austrian market more strongly.

Open questions on the design

The concrete design of the fund-of-funds is still open. It is particularly unclear how large the volume will be, which private partners will be brought in, and which focal areas the fund will target – for example, climate technology, life sciences, or the digital economy. The state secretary announced further details in the coming months.

Business associations and start-up representatives welcomed the initiative in principle. At the same time, they stressed that, in addition to capital, tax framework conditions, bureaucracy reduction, and access to talent are crucial for keeping the location attractive in the long term. The fund-of-funds alone will not end the slump, but it can send an important signal.

With the planned launch in early 2027, the fund-of-funds is to be available in time for the next investment wave. Observers see the step as a signal that the federal government – despite a difficult economic situation – is specifically betting on innovation and growth through young companies. The coming months will show whether the concept meets with sufficient resonance in the market.