Saarland’s Investment Offensive: Fueling Innovation and Start-up Growth
Introduction
The German state of Saarland has launched an ambitious investment initiative to support young, innovative companies and startups. This move is part of a broader effort to foster economic growth and innovation within the region.
Risky Capital and Support Programs
At the heart of the initiative is a €40 million risk capital fund established by the Saarländische Investitionskreditbank AG (SIKB). This fund will provide critical funding to startups through equity and loan investments.
The new fund complements existing support programs, increasing the total amount of funding available to startups in Saarland to around €162 million. According to Minister of Economic Affairs Jürgen Barke, this makes Saarland "the most innovative startup promoter in Germany, with the most differentiated startup support system in existence."
Focus on Mid-Sized Businesses and Startups
The investment offensive is particularly focused on supporting mid-sized businesses and spin-offs from universities. These entities are seen as vital for economic growth and innovation. As Minister Barke emphasized, they represent "the fresh blood" that the economy needs to drive research and development of new products.
Funding Mechanisms and Investment Strategy
The €40 million fund will be allocated for both silent and active equity participations. €20 million will be directly managed by SIKB and will be industry-agnostic. The remaining €20 million will be invested through SIKB in supra-regional fund structures, with a target investment volume of around €250 million. A key requirement for accessing the fund is that investments must be made within Saarland.
SIKB chairman Achim Köhler believes that the combination of public and private funding creates a unique environment for innovative founders. The equity fund, which is expected to launch in the second quarter of 2023, is designed to be an "evergreen fund" that will provide long-term support. Returns on investments will be reinvested in new companies.
Investment Parameters and Fund Management
The maximum support from the fund is set at €2.5 million. For silent participations, the term is fixed at ten years. For companies where SIKB takes an active shareholding, the investment period is planned to be five to ten years. The fund will leverage private investments, ensuring that funding is provided in tandem with private investors.
Conclusion
Saarland’s investment offensive is a significant step forward in the state’s efforts to support innovation and economic growth. By providing access to risk capital and tailored support programs, the initiative aims to foster a vibrant startup ecosystem and stimulate the development of novel technologies and businesses. The long-term nature of the funding, coupled with the public-private partnerships, creates a solid foundation for the sustainable growth and success of young companies in Saarland.
