Germany has created a $12 billion fund to speed up the growth of startups in the technology sector. The country sees such companies as key to creating the jobs of the future. The money will be used to address the difficulties startups face when trying to raise venture capital, Bloomberg reported.
“Startups are motors of structural change,” Economy Minister Peter Altmaier told reporters in Berlin on Tuesday (June 22). “They create jobs and secure the basis for future prosperity and growth in Germany and Europe.”
German Finance Minister Olaf Scholz said that female founders are underrepresented in tech startups, a problem that should be dealt with soon. Scholz is running on the Social Democratic Party ticket to succeed Christian Democrat Angela Merkel as chancellor.
Such German startups as FinTech N26, air-taxi maker Lilium and travel platform Omio raised about $4.5 billion last year. However, the biggest rounds were led by foreign investors, according to consulting company EY.
Investors’ interest in European tech companies has mushroomed this year. The continent’s startups raised more venture capital in the first six months of 2021 than they did in all of last year, CNBC reported on Friday (June 18). Data provided from Dealroom showed that startups in Europe raised $60.9 billion in the first six months of this year, beating out the total recorded in 2020. In fact, the number of venture deals announced so far is around half the number recorded in 2020. Dealroom figures show that about 2,700 funding rounds have been inked so far in 2021, versus 5,200 last year.
Among the biggest funding rounds are the Swedish buy now, pay later (BNPL) company Klarna ($1.6 billion over two rounds), the German stock trading app Trade Republic ($900 million in May) and Checkout.com, a British payments provider that kicked off 2021 with a $450 million funding round.