(Bloomberg) — Germany is planning a 30 billion euro ($30.4 billion) fund to support technology-oriented startups.
The fund was approved by the German cabinet on Wednesday as part of a broader strategy to make the country a more attractive location for startups and innovation.
The government will work with private investors and tap into 10 billion euros of public money from the state-owned lender KfW to raise the “Future Fund,” it said.
It will prioritize companies investing in deep tech and climate solutions including artificial intelligence, hydrogen technology, quantum technology and sustainable mobility.
While venture capital investment is rising in Germany, Europe’s largest economy is still lagging international peers, the government said.
Most of Europe’s largest “growth companies” are financed by U.S. investors, which lure many of the most successful startups to relocate, it said. The strategy aims to encourage them to remain in the EU long term.
The government is also looking to lower hurdles for foreigners seeking work in the country’s tech sector, as well increasing the tax-exempt amount for employee stock options.
It will review issues around remote work, including taxation and labor law, so that companies can hire talent overseas without requiring relocation.
Anna Christmann, the government’s special envoy on startups, said Wednesday in a video call with reporters that the new strategy gives “a clear signal that venture capital can also be an interesting investment for public funds and that already a small share could have a big influence on the venture capital market.”
Germany’s Startup Association praised the strategy for highlighting the importance of startups to Germany’s long-term competitiveness, but said that it fell short on the issue of taxation.
“A strategy is only as good as its implementation,” said Chairman Christian Miele in a statement.
“The German government must not hide behind commitments to review things. To make Germany the world market leader for startups, we need more courage and determination.”
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