LONDON The German government has launched a public venture capital fund worth 262 million euro (about $320 million) over the next five years that is intended to support technology-based startups, according to a European Commission website which referenced the Partners for Innovation website as its source.
The fund will mainly use public money although the state-owned bank KfW is expected to contribute 11 million euro (about $13.4 million) and three German multinational companies, BASF, Siemens and Deutsche Telekom are expected to contribute 11 million euro to the fund.
Although not expressed explicitly the implication is that the money is only intended to be invested in startups located in Germany. Recipients are expected to include spin-offs from public research institutions and universities as well as corporate spin-offs, the European Commission said.
The fund will have a starting volume of 142 million euro (about $170 million), financed through German federal sources to the tune of 120 million euro (about $145 million) and the remainder coming from KfW, BASF, Siemens, and Deutsche Telekom, the European Commission said. There is a plan to increase the size of the fund to 262 million euro to help it last until 2010.
For each start-up project, typical funding commitments are expected to be between 500,000 euro (about $600,000) and 1 million euro (about $1.2 million). Three proposal evaluation committees are planned: material and life sciences; information technology, automation and optical technologies; and telecommunication and new media.
The High-tech Startup Fund has been created as part of a reform of Germany’s previous federal venture capital programs, which started early in 2004, with the creation of an umbrella fund to provide fresh money for venture capital companies investing in the expansion stages of technology-based enterprises money.