The WIN initiative: 12 billion euros for Germany's startup and innovation landscape

Photo collage copyright: kfw, Bitmi and exist

Background and objectives of the WIN initiative

The WIN initiative was developed to address two key challenges facing the German innovation landscape: the lack of growth capital and the fragmentation of the startup ecosystem. Startups in particular that are in the growth phase often encounter difficulties in mobilizing sufficient capital to scale their business models.

The WIN initiative starts right here and pursues several goals:

1. Fostering the startup ecosystem: By strengthening growth and innovation capital, the initiative aims to provide support to young companies in all phases of development — from start-up to expansion. In addition to financial aid, structural and legal frameworks are also being optimised to promote investments.
2. Mobilizing private capital: A core goal of the WIN initiative is to activate private capital. The initiative provides for close cooperation between politicians and private investors in order to close existing financing gaps. Especially during the growth phase of many startups, this is intended to pave the way to sustainable success through fresh financial injections.
3. Strengthening innovation financing: To increase the attractiveness of investments in young companies, the initiative includes measures such as tax incentives for venture capital funds and improving conditions for IPOs and exits.

The 10-point plan: concrete measures to strengthen the ecosystem

At the heart of the WIN initiative is a comprehensive 10-point plan that includes measures along the entire value chain and focuses on the following key areas:

1. Promoting cooperation between universities and companies: One of the most important measures is to strengthen cooperation between universities, investors and companies. The EXIST lighthouse competition “Startup Factories” is intended to promote the founding of science-based startups. By 2025, up to ten new start-up factories will be built, which will transfer scientific innovations into marketable companies.
2. Establishing asset classes for private individuals: In order to mobilize more capital, wealthy individuals and institutional investors should be able to invest more in venture capital. New fund vehicles such as the “European Long-Term Investment Fund” (ELTIF) are to be developed for this purpose.
3. Tax breaks: To make investments in growth and innovation capital more attractive, the initiative is planning tax incentives. This includes increasing the ratio for venture capital investments and adapting investment regulations.
4. Secondary market for venture capital funds: Another measure is to create a secondary market for venture capital shares. This should increase liquidity and strengthen the venture capital ecosystem in the long term.

Impacts on various actors

The WIN initiative aims to support various players in the innovation ecosystem — from startups to SMEs to investors.

For startups: capital, networks and scaling opportunities

The WIN initiative starts where many startups reach their limits: with access to growth capital. Startups in Germany are often struggling with a funding gap, particularly during the phase in which they want to bring their innovations to market readiness and scale them. This initiative is intended to fill this gap by not only providing more capital but also improving the legal and regulatory framework. Especially in the area CleanTech, of sustainable technologies, new financing models are planned to advance groundbreaking innovations. This could promote breakthrough technologies to combat climate change and contribute to the transformation of the German economy.

For SMEs: Innovation Partnerships and New Markets

German SMEs, often referred to as the “backbone of the German economy,” will also benefit from the WIN initiative. Through increased cooperation with startups, established companies can strengthen their innovative strength. The dynamic exchange between young, technology-driven companies and medium-sized companies opens up new opportunities for opening up markets and integrating innovative business models. The initiative specifically promotes such partnerships and thus strengthens the competitiveness of SMEs in the long term.

For investors: More attractive conditions and new exit options

Private and institutional investors play a key role in the success of startups. The WIN initiative provides various incentives to improve the investment climate. In addition to tax breaks, targeted fund vehicles such as European Long-Term Investment Funds (ELTIFs) are to be created, which offer investors access to a diversified asset class. Creating a secondary market for venture capital shares also makes investments more attractive, as this increases liquidity and allows risks to be better managed.

Implications: Sustainable growth and technology leadership

The implications of the WIN initiative are far-reaching. The interplay of public and private capital creates a breeding ground for sustainable economic growth and technological excellence. Startups are regarded as the “SMEs of tomorrow,” and through targeted funding measures and investments, they can further expand their role as job engines and innovation leaders.

The initiative also helps to strengthen Germany's competitiveness on an international level. By strengthening the innovation ecosystem, Germany is becoming an increasingly attractive location for startups, investors and technology companies.

A cultural change in the investment sector

Another important goal of the WIN initiative is to promote an active investment culture in Germany. Until now, the German market has been considered rather cautious when it comes to venture capital investments. The WIN initiative is intended to change this. Institutional and private investors should be encouraged to invest more in young, innovative companies in order to fully exploit the country's economic potential.

Conclusion: Germany's path to the future of innovation

With the WIN initiative, Germany is taking an important step to consolidate innovation leadership in Europe and to give startups the necessary support they need to grow. The investments of 12 billion euros by 2030 will not only improve access to capital, but also optimize the framework conditions for business start-ups and expansions. Startups as well as SMEs and the investment community benefit from this. In the long term, the WIN initiative is intended to contribute to a sustainable transformation of the German economy by promoting innovative technologies to combat climate change and paving the way for new, fast-growing industries.

Germany is getting ready for the future — and the WIN initiative is at the forefront of this development.

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Sources:
https://www.exist.de/EXIST/Redaktion/DE/Aktuelles/Nachrichten/win-initiative-start-ups.html
https://www.kfw.de/%C3%9Cber-die-KfW/Newsroom/Aktuelles/WIN-Initiative.html
https://www.bundesfinanzministerium.de/Content/DE/Pressemitteilungen/Finanzpolitik/2024/09/2024-09-17-start-up-standort-deutschland.html
https://www.bundesregierung.de/breg-de/aktuelles/breites-buendnis-aus-wirtschaft-verbaenden-politik-und-kfw-bekennt-sich-im-rahmen-der-win-initiative-zum-start-up-standort-deutschland-2309016

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