High-tech in Germany: Long-term investments through the DeepTech Future Fonds

The DeepTech Futue Fonds (DTFF) is a new high-tech (deep-tech) investment fund that is financed by the ‘Zukunftsfonds’ (Future Fund) and the ERP Special Fund.

Over the next ten years, the DTFF will be able to leverage a prospective total investment volume of up to EUR 1 billion.

As a co-investor, the fund is designed to support the growth ambitions of deep-tech companies in Germany that have the potential to become market leaders.

High-Tech Gründerfonds is responsible for managing the DTFF.

Berlin/Bonn, 22 June 2021 – The DeepTech Future Fonds (DTFF) is a new high-tech (deep-tech) investment fund that is financed by the ‘Zukunftsfonds’ (Future Fund) and the ERP Special Fund. It has been launched with the task of helping deep-tech companies with validated business models to achieve sustainable growth while retaining their independence. The DTFF will always invest together with private investors. Acting as an anchor investor, its goal is to guide deep-tech companies on their journey towards capital market readiness. Based on this long-term perspective, the fund aims to bolster Germany’s profile as a hub of innovation and enhance its appeal for high-tech firms in the long term. Over the next ten years, the DTFF will be able to leverage a prospective total investment volume of up to EUR 1 billion. The fund will run for at least 25 years, with High-Tech Gründerfonds assuming responsibility for its management.

Thomas Jarzombek, the German Economic Affairs Ministry’s Commissioner for the Digital Industry and Start-ups: “The launch of the DeepTech Future Fonds as the first module of the ‘Zukuntsfonds’ is a huge success for everybody involved. With a prospective total volume of up to EUR 1 billion, the fund has an excellent foundation. In addition, a multiple of private capital will be mobilized. The DeepTech Future Fund is intended to foster high technology for future prosperity and thus strengthen the competitiveness of the German economy.”

Dr. Jörg Kukies, State Secretary in Germany’s Federal Ministry of Finance: “Our shared goal is to further expand Germany’s standing as a high-tech hub. We see the DeepTech Future Fonds as a platform for building bridges between investors with a long-term approach, the German ‘Mittelstand’ and growing deep-tech companies. Moving forward, the aim is to get more of these companies in Germany IPO-ready, which will enable us to strengthen Germany as a hub for business and finance. To support these efforts, we’ll provide up to EUR 1 billion in funding.”

Guido Schlitzer, Managing Director at High-Tech Gründerfonds and responsible for the establishment of the new DeepTech Future Fonds: “The DeepTech Future Fonds will invest in high-tech companies that have the potential to become global market leaders. Our clear objective is to create new hidden champions. Backed by “Zukuntsfonds” financing, and with the support of strong entrepreneurs, private investors pursuing a long-term approach, and an experienced investment team, we are looking to help shape the future of Germany as a deep-tech hub.”

The fund is aimed in particular at companies active in the conventional deep-tech fields of Industry 4.0/IoT, robotics, AI, quantum computing, blockchain and process automation, for example, as well as at firms with tech-based business models, such as digital health, new energy, fintech, smart city and selected biotech fields. The fund is also open to deep-tech companies offering technology and innovation that have the potential to significantly influence other markets in future.

As a first step, an amount of EUR 1 to 10 million will be invested per company, with maximum investment capped at EUR 30 million per company. The DeepTech Future Fonds will function as a co-investor, investing alongside private investors such as family offices, private companies and foundations under the same conditions, with public funding accounting for up to 70%. The DTFF will always hold a minority stake of less than 25% of the voting rights, which is in step with all other public investment funds.

Deep-tech companies will be able to retain their long-term independence. The DTFF also finances “buy & build” strategies and can offer existing shareholders an exit opportunity as part of a share purchase agreement.

The DeepTech Future Fonds
The DeepTech Futue Fonds (DTFF) is a new high-tech (deep-tech) investment fund that is financed by the ‘Zukunftsfonds’ (Future Fund) and the ERP Special Fund. It finances growing deep-tech companies with validated business models that have longer-term development cycles and high financial requirements. It aims to offer these companies a long-term perspective in Germany. To support these efforts, a prospective total investment volume of up to EUR 1 billion will be available over the next ten years. The DTFF always invests together with private investors that pursue a long-term approach. High-Tech Gründerfonds is responsible for managing the DTFF.

Contact
Tobias Faupel
Principal I DeepTech Future Fonds
+49 (0) 151 26324824
t.faupel@deeptech-future-fonds.de

The ‘Zukunftsfonds’
The ‘Zukunfsfonds’ (Future Fund) was launched by the German federal government with the goal to bring about a long-term improvement in financing conditions for innovative tech companies in all phases of development – especially in the capital-intensive scaling phase of start-ups – and will invest  EUR 10 billion by the end of 2030 to achieve this goal. The concept of the ‘Zukunftsfonds’ envisages both the quantitative and qualitative expansion of existing funding instruments and the development of new instruments. The first building blocks have already been put in place, with additional components set to follow as they are gradually developed and introduced. The German federal government has assigned KfW and its investment subsidiary KfW Capital the task of implementing and managing the ‘Zukunfsfonds’. For more information visit: https://www.bmwi.de/zukunftsfonds and www.bundesfinanzministerium.de/zukunftsfonds