Startups: BERLIN wants to move from unicorns to industrial champions

Like many European countries, including France, Germany no longer lacks entrepreneurial ambition. Its problem begins after companies are born: financing a factory, securing a first public-sector contract, hiring internationally, and preventing a decisive funding round from shifting a company’s centre of gravity elsewhere. Through 152 measures, Berlin now wants the state to become a co-investor, a first customer and an organiser of technological sovereignty. This doctrine brings Germany closer to France, which has built a centralised policy around BPIFRANCE; to the United Kingdom, whose financial market remains the deepest in Europe; and to the Nordic countries, which are further ahead in mobilising institutional investors. Germany’s distinctive ambition is to combine all three approaches within a single industrial chain.

In the first half of 2026 alone, 3,053 startups were created in Germany, up 52% from the previous six months and almost matching the 3,568 companies founded during the whole of 2025. German startups and scaleups employed around 522,000 people in 2024, 26% more than four years earlier, while the country had 36 unicorns as of July 2026, according to an analysis by BUNDESVERBAND DEUTSCHE STARTUPS cited by the government.

Yet this vitality does not solve the problem now preoccupying Berlin. Germany attracted €7.2 billion in venture capital in 2025, but the largest rounds are still mostly led by international investors. IPOs remain rare, and 92% of exits take place through trade sales. Germany knows how to create technology companies; it is less consistently able to provide the capital, initial markets and infrastructure required to turn them into industrial groups without seeing part of their activity migrate to London, Paris or the United States. Most European countries face the same problem, while continuing to concentrate investment efforts primarily at national level.

This is the weakness targeted by the startup and scaleup strategy adopted at the end of July 2026. Its 152 measures, spread across roughly 60 pages, mobilise almost every fund, agency, public bank, university programme and acronym available to the German administration. The document could be read as an inventory, but above all it reveals a change in doctrine.

The 2022 strategy focused primarily on improving the general conditions of the ecosystem. The 2026 version explicitly places scaleup growth, industrialisation and security at the centre of public intervention. Berlin no longer wants merely to cultivate entrepreneurial activity. It wants to organise the chain connecting a scientific technology to its financing, then to its first factory, its first customer and, ultimately, to keeping the company in Germany or Europe.

Startup policy is becoming a policy of power. Germany is not alone in making this shift: Paris, London, Helsinki, Stockholm and Copenhagen have been working on the same weaknesses for several years. Berlin’s distinctive feature lies less in inventing another instrument than in attempting to bring together, within a single architecture, the French investor-state, British-style capital markets and Nordic institutional capital.

Germany’s problem begins after companies are created

The instruments introduced over the past 15 years have built a strong early-stage ecosystem. HIGH-TECH GRÜNDERFONDS, KFW CAPITAL, the EXIST programmes, universities and regional hubs have multiplied founding teams, incubators and first funding rounds. This infrastructure works well when the task is to finance a handful of engineers, build software or demonstrate that a market exists. It becomes less effective when a biotech company must sustain several years of clinical development, when a quantum startup needs access to fabrication equipment, or when an industrial deeptech company must build a production line before it has secured a commercial reference.

A prototype may persuade a venture capital fund. A first factory must simultaneously persuade investors, banks, insurers, public authorities and customers that the technology will work at industrial scale, at the promised cost and within the expected timeframe. This is precisely where many European companies begin looking for capital elsewhere. In return, international investors may demand a US presence, the relocation of headquarters, a local management team or a legal structure better suited to their own markets. The company may remain European through its founders and its communications, but its growth has already moved to another continent.

The United Kingdom provides the first point of comparison. Its market remains significantly deeper: British SMEs raised £12.3 billion in equity finance in 2025, within a total market of £17 billion, according to the BRITISH BUSINESS BANK. London has specialised asset managers, international investors, tax incentives such as EIS and VCT schemes, and a financial culture that is more tolerant of unprofitable technology companies. That depth does not prevent British companies from moving to or listing in the United States, but it gives them more options before they do.

France and Germany compensate for shallower capital markets through more structured public intervention. The Nordic countries, meanwhile, generate strong results relative to their populations but remain dependent on foreign capital for the largest rounds. According to DEALROOM’s 2026 Nordic report, international investors supplied 66% of the capital invested in the region’s startups in 2025, while only 47% of funding went to later-stage companies, compared with 69% in the San Francisco Bay Area. The geography may change, but the funding gap remains.

The DEUTSCHLANDFONDS is meant to follow startups all the way to the factory

The first change concerns the role of the state as an investor. Until now, KFW CAPITAL primarily operated as a limited partner in private funds. Through SCALE-UP DIRECT, it can now co-invest directly in scaleups alongside managers from its fund portfolio, with the first transactions launched in December 2025. The ZUKUNFTSFONDS is due to be extended beyond 2030 and strengthened as part of the DEUTSCHLANDFONDS, while a second generation of WACHSTUMSFONDS DEUTSCHLAND has been announced. HIGH-TECH GRÜNDERFONDS, meanwhile, is expected to launch a fifth vehicle in 2027 and become the central platform for federal startup holdings by integrating the DEEPTECH & CLIMATE FONDS.

The government is therefore not creating a single fund, but a set of instruments designed to intervene at different stages of a German company’s development. This architecture is set to receive an additional €1.5 billion from the federal government and KFW over ten years for startups, scaleups and the MITTELSTAND. TECH-FONDSINVEST is expected to receive around €770 million in additional funding, while KFW CAPITAL’s annual commitments are due to rise to €250 million.

The most interesting measure concerns so-called First-of-a-Kind projects: up to €300 million for private funds financing first industrial facilities. These projects occupy an uncomfortable position. They are too advanced to qualify as research, too risky for conventional bank financing and too capital-intensive for most venture funds. Berlin is trying to finance the moment when a technology leaves the demonstrator stage and encounters construction costs, industrial yields, supplier delays and the demands of first customers.

CYLIB already provides a concrete example of that transition. The battery recycling company has begun building its first industrial facility in Dormagen, with capacity to process 30,000 tonnes per year. A €63.4 million federal grant is expected to finance an additional production line dedicated to LFP batteries. The case illustrates precisely why venture capital is no longer sufficient: the company must combine equity, existing chemical infrastructure and public support before it has even demonstrated its economics at scale.

France is already intervening in this area, under a more centralised doctrine. The FRANCE 2030 programme, worth €54 billion across industrial sectors, research, skills and infrastructure, is not directly comparable with Germany’s €300 million initiative. It nevertheless finances dedicated scale-up instruments, including the PREMIÈRE USINE programme and the €350 million FONDS NATIONAL DE VENTURE INDUSTRIEL. BPIFRANCE can also combine grants, repayable advances, loans, guarantees, direct investment and commitments to private funds. Where Berlin still divides these functions between KFW, HTGF, DTCF and several other vehicles, Paris has built a single institution capable of supporting companies across a broader part of their development.

VERKOR is particularly useful in showing the limits of that model. To build its gigafactory in Dunkirk, the company combined equity, bank debt, financing from the EUROPEAN INVESTMENT BANK, public subsidies and a commercial commitment from RENAULT. The factory exists, but according to the carmaker its production ramp-up is running around 18 months behind schedule, while its competitiveness gap with Asian battery cells manufactured in Europe has reportedly widened. RENAULT has had to turn to LG to secure certain launches and excluded VERKOR from a tender for its future Master van.

Centralisation provides clarity, but it is not in itself proof of industrial effectiveness. FRANCE 2030 has financed numerous demonstrators and first factories, yet companies still run into electricity grid connections, permits, construction cost overruns and the lack of sufficiently long-term offtake agreements. A subsidy reduces the cost of risk; it does not create the customer, the market price or the economics of the facility. France’s experience confirms the German diagnosis while providing a warning: identifying the financing gap is easier than building the entire bridge across it.

It remains to be seen how Germany’s choice to intervene through private funds, particularly through debt, will work in practice. Debt is appropriate for an asset with relatively predictable revenues, but becomes harder to absorb when a first factory still needs to prove its economics. Without guarantees, offtake contracts or explicit risk-sharing, debt may simply shift the problem onto a company that does not yet generate enough cash to repay it.

France has moved ahead in organising long-term savings

Public money alone will not finance Germany’s industrial ambitions. The WIN-INITIATIVE is intended to raise private commitments to Germany’s venture capital ecosystem to €25 billion. EIF GERMAN EQUITY, meanwhile, plans to invest €1.6 billion in German and European funds between 2026 and 2030, including €1.4 billion from the ERP special fund. Above all, Berlin wants to mobilise insurers, pension funds and retirement savings products, whose long investment horizons should in theory match the needs of deeptech.

On this issue, the European reference is less London than Paris. Launched in 2020, the TIBI initiative does not create another public fund. Instead, it organises commitments from insurers, mutual insurers, large companies and other long-term investors into accredited technology funds. In June 2026, its third phase announced an additional €13 billion in commitments, following nearly €16 billion mobilised during the first two phases, with the goal of directing 50% of new investments towards deeptech. Total commitments announced since 2020 are therefore approaching €31 billion.

These figures deserve the same caution as the €25 billion attached to the WIN-INITIATIVE. They represent investor commitments, not money immediately transferred to startups. Several years may pass between an allocation pledge, fund selection, fundraising, the investment period and the effective deployment of capital. TIBI has nevertheless created genuine market infrastructure: 176 funds had been accredited by March 2026, and several French managers have been able to raise larger vehicles. France has therefore moved ahead in the collective learning process required to transform regulated long-term savings into technology capital.

The next stage is already Franco-German. Paris and Berlin are working on the creation, before the end of 2026, of a joint institutional investor platform around Franco-German funds, which would later be opened to other EU member states. It is a sign that the two countries are no longer content with parallel national policies. They are trying to aggregate their limited partners to create funds capable of leading rounds worth several hundred million euros.

The French model nevertheless has its own weakness. It can redirect large investors towards private funds, but it does not guarantee where the financed companies will be located, whether they will remain in France or whether industrial demand will emerge locally. A pan-European fund can quite rationally invest in a Swedish, British or American company if the expected returns are higher. Sovereignty does not follow automatically from the nationality of the limited partner.

The United Kingdom retains the market advantage, but is also searching for patient capital

The United Kingdom starts from the opposite position. It has Europe’s leading venture capital market, but is trying to retain more companies and reconnect British savings with its domestic technology sector. The permanent financial capacity of the BRITISH BUSINESS BANK is due to reach £25.6 billion from April 2026. The institution plans to allocate more than 60% of its venture and growth investment flows to scaleups, including at least £5 billion in growth funds and high-growth companies over the following five years.

The NATIONAL WEALTH FUND complements this architecture with £27.8 billion in capital and a mandate allowing it to invest through equity, debt or mezzanine financing in First-of-a-Kind technologies. The BRITISH GROWTH PARTNERSHIP and MANSION HOUSE ACCORD, meanwhile, are designed to mobilise pension funds. London is therefore no longer relying solely on the spontaneous depth of the City: the British government is also building a continuum between research, public procurement, public banking and institutional capital.

The difference with Germany lies less in the direction of travel than in the starting point. British players already operate in a larger asset-management market, benefit from more exits, have universities accustomed to creating spin-outs and are better able to attract US and Asian capital. The trade-off is greater exposure to those same investors: a funding round led in London can quickly prepare the ground for a NASDAQ listing or the relocation of part of the management team to the United States. The market finances growth more easily, but does not guarantee that the company will remain British.

Two Oxford spin-outs capture this ambiguity. OXFORD NANOPORE, born in the university’s chemistry department, chose the LONDON STOCK EXCHANGE for what was, in 2021, the largest IPO ever completed by a British university spin-out. OXFORD IONICS took the other route: six years after its creation, the quantum computing company was acquired by US-based IONQ for $1.075 billion. The United Kingdom knows how to turn research into highly valued companies. It does not guarantee that control of those companies will remain British.

Berlin is therefore attempting to manufacture through public policy a depth that London largely inherited through financial history. Paris organises savings through fund accreditation. The United Kingdom seeks to redirect savings through pension reform and market vehicles. Germany is combining both approaches, at the cost of a more complex architecture.

The Nordic countries show the value of leaner institutions

There is no single Nordic model. Sweden, Finland, Denmark and Norway have different pension systems, public banks and industrial policies. They nevertheless share two characteristics: small domestic markets, which force companies to think internationally very early, and a longer history of institutional investor participation in private markets.

Finland provides the closest example to Germany’s new ambition. TESI invests in funds, directly in startups and scaleups, and in new industrial projects. Its investment capacity is due to reach €1.8 billion between 2025 and 2029, with the goal of mobilising €14 billion for the growth of Finnish companies alongside private investors. Its KRR fund-of-funds vehicles are particularly instructive: TESI has committed €302 million to them since 2008, Finnish institutional investors have brought their combined size to €845 million, and the 53 underlying funds had raised €4.8 billion by the end of 2025. The mechanism gives pension funds diversified exposure to venture capital while providing local managers with a recurring anchor investor.

ICEYE illustrates what such anchoring can achieve. TESI first invested in the radar satellite manufacturer in 2018. In June 2026, the company raised €450 million in new equity in a transaction exceeding €1 billion including secondary sales, at a valuation of €10.5 billion. The round was led by US-based GENERAL ATLANTIC, but TESI remained the largest shareholder among Finnish investors. The public institution did not finance the champion on its own; its presence helped preserve a Finnish capital base as the company moved to a new scale.

Sweden separates roles more clearly. SAMINVEST, with around SEK 6 billion in capital, acts as a fund of funds and supports private management teams and business angel networks; INDUSTRIFONDEN invests directly in deeptech and life sciences; and the AP pension funds have long-standing experience in private markets. The system relies less on an all-encompassing public bank than on several specialised investors with durable mandates and the ability to recycle returns.

Denmark has chosen another form of integration. Since 2023, EIFO has combined the functions of public investment bank, export finance institution and green-transition fund: loans, guarantees, direct equity, investments in funds and support for Danish companies expanding internationally. Bringing domestic investment and export financing into the same organisation addresses a problem that French and German strategies still often deal with through separate institutions: an industrial scaleup must not only build a factory, it must also finance the contracts that will fill it.

HEART AEROSPACE provides the counter-example. Founded in Gothenburg around a state-supported research programme in hybrid-electric aviation, the company moved its headquarters to Los Angeles in 2025 and shut down its Swedish operations. It said its customers, partners and investors were now primarily located in the United States. A strong ecosystem can create a technology; the location of its first major market may still determine where it is industrialised.

These examples should not be romanticised. The Nordic countries remain highly dependent on international investors for large funding rounds, and industrial failures can be spectacular. NORTHVOLT’s bankruptcy showed that abundant access to capital, energy and public support is not enough when production ramp-up, quality and costs deteriorate simultaneously. The Nordic lesson is therefore institutional rather than mythical: stable public investors capable of investing alongside pension funds and following a company through several rounds reduce financing discontinuities without eliminating industrial risk.

Defence reveals the differences between national doctrines

The chapter devoted to security and defence makes the German shift particularly visible. According to figures cited in the strategy, German DefenceTech startups attracted €1.16 billion in venture capital in 2025, more than half of all European investment in the sector. Defence accounted for around 17% of German VC investment, compared with 4% globally. Nearly 2% of German startups identify directly as DefenceTech companies, and almost a quarter say they are developing dual-use products.

Berlin no longer treats these companies as an awkward exception to innovation policy. The government plans to create a direct-equity vehicle for startups and scaleups producing explicitly military technologies. The strategy specifies that this may include products covered by Germany’s list of weapons of war. This marks a clear break with a period when many European funds, public programmes and institutional investors restricted their activities to dual-use technologies.

France moved earlier in creating specialised vehicles, notably DEFINVEST and the FONDS INNOVATION DÉFENSE. By March 2025, the latter had invested almost €80 million in eleven companies and was targeting a fund size of €300 million. BPIFRANCE had meanwhile committed around €400 million to specialised private funds and launched a €450 million vehicle open to retail investors in October 2025. The French architecture knows how to finance companies deemed strategic. Its test, as in Germany, is whether those equity investments can be converted into defence programmes and significant procurement volumes.

The United Kingdom is pushing the contractual lever more directly. In May 2026, thirteen companies received contracts worth up to £4 million under COMMERCIAL X, the MINISTRY OF DEFENCE’s accelerated procurement scheme. London also plans to increase purchases from SMEs by £2.5 billion, bringing the total to £7.5 billion by May 2028. The difference in scale is revealing: an equity investment finances the company; a military contract validates the product, organises its integration and provides an exportable commercial reference.

The Nordic countries are also moving more quickly to connect civilian innovation, military requirements and industrial policy following Finland and Sweden’s accession to NATO. Finland has made defence one of TESI’s investment priorities; Sweden has adopted a defence industrial strategy explicitly aimed at improving SME access to capital; Denmark, through EIFO, uses loans and guarantees to support capacity expansion. These countries benefit from close relationships between government, industrial groups and technology communities, although their small domestic markets force them to connect almost immediately with NATO, European partners and export markets.

DefenceTech is therefore becoming the most demanding test of the German doctrine. SVI-CONNECT, the CYBER INNOVATION HUB DER BUNDESWEHR, the future INNOVATIONSZENTRUM DER BUNDESWEHR, DIANA, HEDI and the NATO INNOVATION FUND are all intended to bring entrepreneurs, armed forces, test centres and investors closer together. The ecosystem is hardly short of hubs. What remains concentrated among a small number of players is procurement.

A first shift is nevertheless under way. In December 2025, the BUNDESWEHR selected QUANTUM SYSTEMS to replace its ALADIN reconnaissance system: 147 drones were ordered on a firm basis, with up to 600 additional units covered by the framework agreement. Germany’s test is therefore no longer merely whether it can sign an initial contract, but whether it can repeat the process, turn options into volume orders and open the market beyond a handful of already well-funded companies. If the process stops at a few demonstrators or framework agreements, Germany will mainly have created yet another network in which the same participants can collectively observe that public procurement remains difficult.

France has already tested the €100,000 threshold

This difficulty extends well beyond defence. Only 7% of German startups had a public-sector customer in 2025. The administration is willing to finance innovation before it exists, but still rarely buys it once it becomes available. Since July 1, 2026, the federal government has been allowed to place direct orders of up to €100,000 with startups: negotiated procedures have been simplified, selection criteria better adapted to companies without a long track record, and alternative forms of evidence accepted in place of traditional references.

The measure may look new in Berlin, but it is not new in Europe. France began experimenting in late 2018 with an exemption from advertising and competitive tendering requirements for innovative purchases below €100,000 excluding tax, before making the measure permanent in December 2021. The JE CHOISIS LA FRENCH TECH programme also aims to double the use of French startups by public and private buyers by 2027. The comparison is useful precisely because it tempers regulatory enthusiasm: despite several years of implementation, the threshold has not turned the French state into a natural market for startups.

The reason has less to do with the law than with the organisation of risk-taking. A public contract can generate revenue, validate a technology, reassure investors and provide a commercial reference. It can also expose the buyer to failure, delays or an immature product. Public administrations, responsible for service continuity and the use of public money, are naturally incentivised to choose suppliers with existing references, teams and sufficient financial resources. A legal possibility becomes industrial policy only when it is matched with a budget, an accountable decision-maker and a procurement target.

The United Kingdom has developed an approach closer to contracted R&D. SBRI programmes, now marketed under the CONTRACTS FOR INNOVATION brand, fully fund contracts designed to address a public-sector need, with an estimated annual volume of around £100 million. The company does not simply receive a grant to continue its own programme: it signs a contract linked to a problem defined by a public administration. The mechanism does not guarantee progression to large-scale procurement either, but it connects technology development to an identified user at an earlier stage.

Germany’s strategy draws on the same logic by presenting the state as a venture client. DIGITALER MARKTPLATZ DEUTSCHLAND is intended to create a common platform for public procurement, the PLAIN ACCELERATOR will allow companies to present their technologies to several ministries, and the AGENTIC AI HUB will test artificial intelligence agents in public services. The new €100,000 threshold can finance a pilot; it cannot finance a factory or a nationwide deployment. The real metric will therefore not be the number of experiments launched, but the proportion converted into recurring contracts.

University technology transfer exposes three European models

For capital and public contracts to benefit German technologies, those technologies first have to leave the laboratory. Around 40% of companies created out of universities reportedly rely on knowledge or technology transfer, while nearly 10% make direct use of patents or other intellectual property rights. Negotiations can nevertheless take several months: universities seek to protect the value of technologies financed by public research, founders want to avoid royalties that could deter investors, and funds demand sufficiently clear ownership of intellectual property before financing a company. Each party is rationally defending its own interests while the company waits.

Germany’s forthcoming intellectual property strategy is expected to introduce standardised spin-out agreements, valuation guidelines and a database of transactions concluded by research institutions. The ten EXIST STARTUP FACTORIES launched in October 2025 are intended to structure the country’s main university hubs, while an EXIST ACADEMY will professionalise entrepreneurship centres. The government also wants ordinary EXIST grant applications to be processed within six weeks by the end of 2026.

PROXIMA FUSION provides a positive illustration of this continuum. Spun out of the MAX PLANCK INSTITUTE FOR PLASMA PHYSICS in 2023, the Munich-based company raised €130 million two years later to develop a fusion demonstrator based on stellarator technology. The case shows that German research can produce a spin-out capable of attracting international capital quickly. But its main prototype is not expected before 2031: successful technology transfer eliminates neither the length of development cycles nor the need for public infrastructure over almost a decade.

France has chosen mutualisation. Its thirteen SATT organisations finance technology maturation, manage intellectual property and negotiate licences on behalf of several research institutions within the same region. Since their creation in 2012, they have helped generate almost 1,000 deeptech startups, according to their network. The model gives laboratories access to technology-transfer teams that a standalone university could not always maintain, but it also introduces another intermediary with its own valuation rules, deadlines and return objectives. Centralisation reduces some capability gaps without eliminating negotiations over how value is shared.

The United Kingdom currently achieves the strongest spin-out results relative to the size of its research base. According to the BRITISH BUSINESS BANK, the volume of venture capital transactions involving spin-outs increased by 95% between 2016-2020 and 2021-2025, faster than in the United States, Germany and France. London has also promoted standard terms recommending that universities retain 10% to 25% of pre-investment equity in companies based on fundamental technologies and 5% to 10% for software companies. Standardisation has not eliminated tensions, but it has made the starting point more predictable for founders and investors.

Sweden retains one distinctive feature: the teacher exemption, or “professor’s privilege”, allows researchers to personally own the rights to inventions created within a university setting. The system can shorten the decision to create a company because the university does not own the patent. But it transfers responsibility for protecting, financing and negotiating that intellectual property to the researcher, which requires a sufficiently dense ecosystem of incubators, investors and advisers.

Germany cannot simply replicate any of these systems. The Länder, universities and research organisations have their own competencies and significant autonomy. Berlin can propose standard contracts, fund programmes and organise dialogue, but it cannot unilaterally impose a uniform technology-transfer policy.

Germany is trying to combine three imperfect models

The European comparison clarifies the scope of Germany’s strategy. France has the most centralised public architecture: BPIFRANCE supports company creation, financing, industrialisation and exports; FRANCE 2030 selects strategic sectors; and TIBI organises institutional savings. The system is effective at deploying national instruments, but it can also create a world of agencies, calls for projects and political priorities in which administrative selection sometimes takes precedence over market demand.

The United Kingdom has the deepest market, the longest-standing tax incentives and the most developed spin-out ecosystem. The state is now intervening more heavily to mobilise pensions, finance First-of-a-Kind technologies and turn public procurement into a first market. Its weakness is the mirror image of its strength: capital mobility also facilitates foreign acquisitions, US listings and the relocation of decision-making centres.

The Nordic countries show how a public bank or anchor fund can work over the long term with institutional investors, follow companies across multiple rounds and create a more direct link between capital, industry and exports. Their small size nevertheless forces them to attract international investors and customers quickly. Their ecosystems produce global champions without always possessing the resources to finance them alone through to maturity.

Germany is attempting to combine all three strengths: the French investor-state, British financial depth and Nordic institutional participation, while adding its own assets — the MITTELSTAND, a dense industrial base, applied-research institutes and a large domestic market. On paper, the combination is coherent. In practice, it translates into KFW CAPITAL, EIF, HTGF, DTCF, SPRIND, RENTENBANK, ZUKUNFTSFONDS, DEUTSCHLANDFONDS, WIN, WACHSTUMSFONDS and several sector-specific hubs. Berlin is seeking the best of three European models, but it also risks accumulating all of their acronyms.

A national policy whose key levers increasingly sit in Brussels

A German scaleup still encounters different company laws, tax systems, financial markets and administrative procedures as soon as it crosses a border. While a US company can rapidly access a continental-scale domestic market, a European company sometimes has to internationalise its organisation before it has internationalised its sales.

Berlin therefore supports the creation of a 28th regime providing a harmonised European legal form. It also backs EUROPEAN TECH CHAMPIONS INITIATIVE 2.0, the SCALEUP EUROPE FUND, a European savings and investment union, a secondary market for fund interests and simpler financial regulation. Germany may be able to supply national capital and improve its own procedures, but it cannot create alone the market depth its scaleups require.

This European dimension is no longer a diplomatic add-on. TIBI is already seeking limited partners and investments across the continent; despite Brexit, the United Kingdom remains deeply integrated into the financing of European companies; Nordic funds invest beyond their domestic markets; and the largest rounds almost always involve several nationalities. European technological sovereignty therefore cannot rest on 27 national policies, each attempting to keep its champions behind a different border.

The same difficulty applies to state-aid rules, public procurement, pension funds and foreign investment. Several of Germany’s 152 measures are less about taking decisions than about “supporting”, “promoting” or “calling for” changes to European law. Diplomatic language can embed an ambition in a strategy document. It does not guarantee that the ambition will survive negotiations among 27 member states, the European Parliament and the various supervisory authorities.

Power will not be measured by the number of programmes

The European comparison helps avoid two overly simple conclusions. Germany is neither a laggard suddenly discovering venture capital nor the first country to understand that startups need customers and factories. France has already built a public bank capable of intervening across much of the financing chain. The United Kingdom has deeper capital markets and universities that are more effective at producing funded spin-outs. Finland, Sweden and Denmark moved earlier to combine public capital, institutional investors and export strategies.

Yet none of these models has solved the equation. France knows how to finance projects, but still struggles to turn public procurement as a whole into a technology market. The United Kingdom knows how to raise capital, but watches some of its companies leave or list elsewhere. The Nordic countries generate large amounts of value relative to their populations, but depend on foreign investors for their largest rounds. Europe therefore does not lack national instruments. What it lacks is continental continuity between the laboratory, capital, the factory, procurement and the exit.

Berlin has now assigned the roles: KFW CAPITAL is supposed to provide growth capital; the DEUTSCHLANDFONDS to support first industrial facilities; insurers and retirement savings to strengthen private funds; universities to accelerate technology transfer; the administration to place first orders; the BUNDESWEHR to open a market for military technologies; and Brussels to provide the continental legal and financial framework.

Taken individually, each of these levers addresses a documented weakness in Europe’s innovation ecosystem. Taken together, they define the most interesting ambition in Germany’s strategy: no longer treating the startup as a temporarily innovative small company, but as the possible starting point of a strategic industrial capability.