Key promotional area: Innovation – business sector Mittelstandsbank (SME Bank)
Innovation, start-ups and venture capital
Digitalisation of SME sector still lagging
Digitalisation and innovation are two sides of the same coin. Digitalisation is a key driver of the German SME sector’s future competitiveness and innovative strength. Although small and medium-sized enterprises are increasingly addressing digitalisation, they are implementing specific measures only very gradually, meaning there is still a lot of room for improvement.
For digitalisation to succeed, greater attention must be paid to the challenges it poses to small enterprises as well. KfW is therefore improving the promotion of innovation in collaboration with European partners the European Investment Bank (EIB) and the European Investment Fund (EIF). The aim is to create incentives for digitalisation projects and reduce current obstacles to financing.
Flywheel for more innovation and growth: venture capital for the start-up and growth phase
Good prospects for the German venture capital market. KfW provides support in all stages of development.
KfW’s equity financing offering to technology-oriented start-ups and innovative businesses
Venture capital market in Germany: prospects are good but a catch-up is needed
On the one hand, Germany has developed a very dynamic start-up scene in recent years. Digitalisation of the economy and the fourth industrial revolution referred to as “Industrie 4.0” will continue to boost this trend.
On the other hand, however, Germany’s venture capital market as measured against the country's total economic output remains small compared with the United States in particular. The USA invests around twelve times as much venture capital as a percentage of gross domestic product (GDP) as Germany, according to OECD statistics.
There is currently a gap in the stage in which companies tap new markets and grow quickly.
KfW provides support in all stages of development.
The High-Tech Start-Up Fund is the most important and largest source of venture capital in the seed phase. We support young and innovative companies in the start-up and growth phase through ERP Venture Capital Fund investments and coparion.
KfW will make a total of more than EUR 600 million in venture capital available to the venture capital market in the next few years through ERP Venture Capital Fund Investments and coparion alone, thereby leveraging a total investment volume of around EUR 2.5 billion.
As a promotional bank with the requisite staying power, KfW continues to lend constructive support to Germany’s venture capital landscape as it becomes a viable independent market – a growth engine for young, innovative tech companies and a source of impetus for renewal of Germany’s corporate landscape.
The information contained in this online Annual Report 2016 is based on KfW’s Financial Report 2016, which you can download Should this online Annual Report 2016, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2016 takes priority.