Federal Cabinet Adopts New Start-up Strategy: More Venture Capital and First-Ever Focus on Defense

According to calculations by the EY Start-up Barometer, German start-ups raised around 5.3 billion euros in venture capital in the first half of 2026 — an increase of 14 percent compared to the previous year. At the same time, investors are concentrating their money on a few mega-deals with volumes above 50 million euros: "Da Investoren ihr Geld zunehmend in vermeintlich sichere Wetten und wenige Mega-Deals mit einem Volumen von über 50 Millionen Euro stecken". According to the EY report, technology-driven start-ups remain the favorites of funders.

Defense Start-ups at the Center

For the first time, the federal government is placing the area of security and defense at the center of its funding: "Dabei steht erstmals der Bereich Sicherheit und Verteidigung im Fokus der staatlichen Förderung". Start-ups from the defense sector already received 579 million euros in investments in the first half of the year. The government is creating a dedicated direct investment vehicle for this purpose in order to take direct stakes in young companies in this sector.

In parallel, the existing Deutschlandfonds is to be expanded: "plant der Bund unter anderem den Ausbau des Deutschlandfonds". The program uses state guarantees to "um bis zu 130 Milliarden Euro an privatem Kapital für Zukunfts- und Infrastrukturprojekte in Deutschland zu mobilisieren". Foundations, too, are to be given an easier path to invest more heavily in start-ups.

More Capital for Growth and Pensions

A further goal is better retirement provision through venture capital. "Laut dem Strategiepapier sollen Wagniskapital-Investitionen auch in der Altersvorsorge eine größere Rolle spielen." At the European level, "eine einheitliche Rechtsform für die Unternehmen dafür sorgen, dass grenzüberschreitende Aktivitäten spürbar erleichtert werden."

To make the location more attractive, the government wants "den Zugang zu öffentlichen Aufträgen für junge Technologiefirmen erleichtert" and "attraktivere steuerliche Rahmenbedingungen für die Mitarbeiterkapitalbeteiligung" schaffen. Flexible termination rules for highly paid employment relationships are intended to ease the shortage of skilled workers, and successful startups are to be "bei ihrer internationalen Expansion" kept in the country.

Bureaucracy Reduction and Criticism

The plan for a 24-hour company formation, anchored in the coalition agreement, is considered by specialist policymakers to be not yet implementable. Daniel Bettermann (SPD) assessed the plans in the POLITICO format: "Die im Koalitionsvertrag geplante 24-Stunden-Gründung sei wegen bürokratischer Hürden jedoch vorerst unrealistisch, räumt er ein." He did, however, praise the focus on capital-intensive scale-ups and the promotion of technological sovereignty in the defense sector.

The "Schneller Gründen" (Faster Founding) project is intended "durchgängig digitalisieren" administrative processes, as the strategy paper states. Approvals and registrations are thus to be processed faster and without media breaks in the future.

Wadephul's Africa Trip

Independently of Berlin, Foreign Minister Johann Wadephul (CDU) is campaigning on a trip through Nigeria, South Africa, and Mauritania for investments by German companies. According to the federal government, the background is the growing engagement of China and Russian mercenaries on the African continent, which Germany wants to counter.

The analysis of the strategy was placed by Larissa Kögl in the POLITICO format "Technologie & KI am Morgen". Gordon Repinski, Executive Editor of POLITICO Deutschland and host of the "Berlin Playbook" podcast (daily at 5 a.m.), had previously picked up on the measures in his newsletter. Reporting came, among others, from Hans von der Burchard in Lagos. POLITICO Deutschland is an offering of Axel Springer Deutschland GmbH (Axel-Springer-Straße 65, 10888 Berlin); the managing directors are Carolin Hulshoff Pol and Mathias Sanchez Luna.