The German government is seeking an additional €13bn from pension funds to pool venture capital (VC) investments as part of the second stage of its ongoing initiative for start-up and scale-up companies.
The government and the state-owned KfW Development Bank yesterday announced the start of the second phase of the WIN Initiative, a public-private partnership launched in September 2024, at an event attended by companies and organisations currently participating in the project as well as those interested in joining.
The second phase aims to secure commitments of €13bn investments in VC, in addition to the initial €12bn committed by 2030 as part of the first round in 2024, a spokesperson for the finance ministry told IPE.
The government and KfW aim to approach specific potential investors that might traditionally be more hesitant to allocate assets to growth and enterprise firms. These investors could include occupational pension funds (Pensionskassen) and first-pillar pension funds for professionals (Versorgungswerke), the spokesperson said.
Historicallly, exposure to start-up and scale-up firms has been low for the Pensionkassen and Versorgungswerke, which together manage approximately €500bn in assets.
As examples in North America and elsewhere show, the asset-liability structure of the two groups of pension funds makes them well-suited for long-term investments such as VC, the spokesperson said.
This could see first- and second-pillar pension funds “play a pivotal role” to significantly improve financing conditions for start-ups, and benefit from higher expected returns for their members, they added.
By the close of 2025, only €2.64bn of the €12bn committed in the first round of the WIN Initiative has been allocated through direct investments, VC funds, VC fund-of-funds and debt financing, according to KfW.
The German VC market remains smaller in size compared with the US and the UK, despite the volume of investments in domestic start-ups significantly increasing in the second quarter of this year to €3.4bn, KfW noted.
Companies in the growth phase, in particular, often struggle to secure sufficient funding from German and European investors.
“Consequently, this funding gap is often filled by non-European investors,” the finance ministry’s spokesperson said.
If companies relocate abroad to access capital, the result can be the loss of innovative, and sometimes market-leading, technologies, products and services, they added.
Therefore, the government considers it a “key responsibility” to improve the business environment for start-ups and scale-ups in order to create new jobs and boost competitiveness and economic performance, the spokesperson said.
