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Germany Launches 130 Billion in Funds to Improve Startups and Innovation

Startups

Business Honor
19 December, 2025

Germany’s new fund uses 130 billion in order to support startups, attract private investment, create jobs, and strengthen technology sectors.

Germany is proposing an important economic development strategy, involving major investments in startups and innovation. The government has established the Germany Fund, aiming to produce up to 130 billion euros to help startups and growing businesses. Chancellor Friedrich Merz expects that the fund will help Europe's largest economy recover after a difficult time.

Lars Klingbeil, the finance minister, stated that the government will provide about 30 billion euros in public funds, mostly as guarantees. With the aim to motivate private investors to give another 100 billion euros. The funding will be provided to startups in important fields like AI, robotics, and defense, which are considered important for Germany's future.

Klingbeil noted that the Germany Fund will function as a simple contact point for investors. He stated that the aim is to make sure that innovative concepts established in Germany can grow into powerful businesses without needing to move overseas. In addition, the government also aims to provide skilled jobs and maintain Germany's strength in new technology. The funding occurs at a time when Germany faces major difficulties. Dealing with high expenses for manufacturing, strong competition from China, and US tariffs on the European Union.

The leader of Germany's Startup Association, Verena Pausder, recognized the fund but also warned that more effort is needed. Pausder stated that many startups are struggling to raise enough funds to grow into major worldwide corporations. Economic experts remain concerned about their predictions. The Ifo Institute recently lowered its growth expectations for 2026 to 0.8%. Economist Oliver Falck says Germany should also improve infrastructure and carry out strong energy policies. The Germany Fund might help improve the startup ecosystem and set Germany's economic destiny.