The German Federal Government has presented an updated strategy for startups and scaleups in Germany. More than 3,050 startups were founded in the first half of 2026, while the number of German “unicorns” has also increased. However, young technology companies continue to face challenges, particularly when transitioning from the startup to the scaling phase.
The updated Startup and Scaleup Strategy bundles 152 individual measures across eight key action areas. The goal: to create a seamless, competitive ecosystem that fluidly connects capital, talent, research, and market opportunities.
To close the chronic growth gap compared to the US and Asia, the Deutschlandfonds (Germany Fund) is being established permanently beyond 2030. In parallel, the Scale-up Direct format strengthens the equity base of young companies through co-investments from KfW Capital, while pioneering industrial facilities are being supported with up to €300 million.
At the same time, the strategy unlocks new sources of capital: venture capital is being firmly integrated into private pension schemes, and the WIN Initiative aims to more than double private capital commitments to over €25 billion. Better tax frameworks and simplified IPO regulations will also facilitate future public listings.
To ensure top-tier scientific research leads to marketable products more frequently, an entrepreneurial mindset is being embedded from schools through to universities. The established EXIST funding program is being significantly accelerated—decisions will now be made within six weeks and expanded by ten global Startup Factories.
A binding framework for intellectual property (IP) provides clarity for spin-offs, while regulatory sandboxes, specialized incubators like "BaStI" for battery technology, and SPRIND funding pave the way for breakthroughs in fusion and quantum tech.
For the first time, the Federal Government is opening state innovation funding on an equal footing to the security and defense sectors. The Deutschlandfonds is establishing dedicated DefenceTech fund vehicles for this purpose.
To help startups secure government contracts more quickly, a new procurement acceleration law for the German Armed Forces (Bundeswehr) simplifies access. Concurrently, networks like the NATO Innovation Fund and the Cyber Innovation Hub build bridges to international partners.
Bureaucracy remains one of the biggest bottlenecks for founders—a reality the flagship project "Schneller Gründen" (Faster Founding) aims to change dramatically. The entire incorporation process is being digitized using the Once-Only Principle, automatically assigning tax and commercial register numbers.
By the end of 2027, the Central Funding Portal (Zentrale Förderzentrale) will consolidate all applications online. Support for the European legal form EU Inc. and reforms to the status determination procedure for freelancers provide the necessary legal certainty.
To make public procurement easier for startups, a special direct award threshold of €100,000 is being introduced to significantly cut red tape. New platforms like the Digital Marketplace Germany and the Research Data Act also grant founders access to valuable data and computing power. Fair competition is guaranteed through the strict enforcement of the Digital Markets Act (DMA), limiting the market power of major tech gatekeepers.
In the global competition for top talent, Germany is launching a new Work-and-Stay Agency alongside accelerated visa procedures. Tax law reforms (§ 19a EStG) make employee stock ownership plans more attractive, preventing tax burdens on illiquid shares (dry income). The package is rounded off by flexible conditions for high earners and targeted diversity initiatives—ranging from improved tax deductibility for childcare to fellowships for female investors.
The connection between established industry (Mittelstand) and agile startups is being actively driven through the Venture Clienting model, allowing mid-sized companies to test startup solutions directly as customers within their operations. Tighter integration between the Mittelstand-Digital Centers and the de:hub Initiative creates valuable synergies and speeds up transformation across the mid-market.
Bundled under the "Startup Germany" master brand, all public funding and networking offers abroad will present a unified front. The German Accelerator is expanding its reach into new markets, including Africa, with a strong focus on Security & Defence.
To keep the support system lean, the Federal Ministry for Economic Affairs and Climate Action (BMWE) is conducting a state efficiency check on all programs by summer 2027 to eliminate duplicate structures, with progress documented transparently in annual reports.
The startup and scaleup strategy brings together measures across the key phases of business development, from financing and research transfer to company formation, public procurement, skilled workers, internationalisation and collaborations with small and medium-sized enterprises. These eight areas of action are further supported by targeted industry initiatives for DeepTech (e.g. batteries, fusion and quantum technology), AgTech (e.g. €230 million in venture capital via Rentenbank) and simplified access to data and AI.
You can find the detailed strategy containing all 152 measures and background here.
This text was created with AI assistance and editorially reviewed.