Investment & Fund Management

In December 2021, the European Investment Fund (EIF) launched the GFF-EIF Growth Facility in partnership with the German Future Fund (GFF) to address the critical financing gap faced by later-stage startups in Germany. Prior to this initiative, many German startups struggled to secure growth financing, often relying on external funding sources, particularly from the United States. The GFF-EIF Growth Facility, with a total capacity of up to €3.5 billion, aims to bolster the growth-stage startup ecosystem by providing targeted financial support.

By the end of October 2021, the facility had already allocated €193 million to five portfolio funds dedicated to investing in German growth companies, with total commitments reaching €350 million when including other EIF-managed mandates. This strategic investment not only enhances the financial resources available to German startups but also aims to increase their visibility across Europe, encouraging pan-European funds to establish a presence in Germany. The facility is designed to support the internationalization of German companies, helping them to compete on a global scale and reduce the trend of being acquired by US investors due to a lack of local funding options.

The five portfolio funds under the GFF-EIF Growth Facility include:

1. **Digital Growth Fund II**: Targeting €500 million, this fund focuses on growth-stage digital B2B companies in sectors like industrial applications and financial services technology across Germany and Europe.

2. **Eurazeo Growth Fund III**: One of the first EU-based technology growth funds to exceed €1 billion, it targets the scale-up market and has already invested in notable startups like Doctolib, which provides online booking solutions for healthcare services.

3. **Lauxera Growth I**: With a target size of €200 million, this fund invests in healthtech and medtech companies that have shown early product-market fit, aiming to build European champions without them needing to relocate outside the continent.

4. **LSP 7**: Positioned to become Europe’s first €1 billion life sciences venture capital fund, it focuses on innovative therapeutics and diagnostics, with a significant portion of its deal flow originating from Germany.

5. **UVC Growth Opportunities Fund I**: This co-investment fund is dedicated to follow-up investments in existing portfolio companies in Germany, supporting sectors such as software and industrial technologies.

The GFF-EIF Growth Facility is set to invest €300-350 million annually over a decade, significantly enhancing the financing landscape for innovative startups in Germany and contributing to a robust venture capital ecosystem in Europe.