The German government is set to adopt a comprehensive startup strategy comprising 150 measures at a cabinet meeting on Wednesday, aiming to close a persistent gap in venture capital funding with the United States. Economy Minister Katherina Reiche noted that only about 0.15 percent of German GDP flows into venture capital, compared with roughly 0.8 percent in the U.S.
The package includes plans to mobilize up to 130 billion euros in private capital through an expanded Deutschlandfonds and to establish a special direct investment vehicle for security and defence startups via the state development bank KfW. Venture capital was also anchored as a potential asset class in private pension provision for the first time.
The initiative comes as the startup ecosystem showed mixed signals in the first half of 2026: more than 3,000 companies were founded and venture funding rose 14 percent to 5.3 billion euros, yet the number of financing rounds fell 11 percent. Defence startups attracted 579 million euros during the period. The government has pledged to review the strategy's implementation annually.