KfW Capital in focus with Christian Lindner, Federal Minister of Finance.
KfW Capital has been active in the market for five years now. How do you view the most recent developments of venture capital and start-ups in Germany, especially given the challenging times we are living through?
CHRISTIAN LINDNER: It is in the DNA of the venture capital industry not to shy away from demanding situations. Quite the opposite. These are the times when courage and creativity unfold their full effect. We are therefore supporting VC firms and start-ups more than ever, since they are drivers of innovation and new technologies. They develop the products and services that generate growth, attract international investors and strengthen Germany’s competitiveness.
The Federal Government stepped up its financial commitment to venture capital considerably in recent years. More than ten billion euros will flow into the market through the Future Fund alone, and substantial amounts of private capital will also be leveraged. How important do you believe private capital is for the further development?
LINDNER: Superior solutions are inextricably tied to entrepreneurial risk. Private capital is an enabler of innovation and progress. Without private investment, businesses cannot develop further or create jobs and generate success. Private capital increases liquidity, diversifies risks and thereby contributes to economic stability.
KfW Capital is investing successfully in European VC funds. In addition, KfW Capital is active as a market developer. How important are the topics ‘ESG’ and ‘Diversity’ for the VC ecosystem?
LINDNER: ESG and diversity are the success factors of our time, and that also applies to VC funds. Studies have shown that diverse teams often perform better more quickly than homogeneous teams because they are more innovative and often respond with greater agility to trends and new consumer preferences. Funds and enterprises that take ESG factors into account can operate more sustainably and with greater stability in the long term, which reduces the risk for investors. Besides, more and more capital providers are attaching importance to ethical and social responsibility.
My wish for KfW Capital’s fifth birthday is…
LINDNER: … that its courage and passion continue to pay dividends, and that through its engagement the German venture capital industry will become even more diverse, more open to technology and more innovative and, of course, financially strong.
Published on KfW Stories on 12 Ovtober 2023.