From Innovation to Growth: Closing Germany’s Financing Gap
Insights from FunderNation CEO Uli Fricke
Germany has no shortage of innovative companies. The challenge is ensuring that they can access sufficient capital when they are ready to grow. In a recent interview with GoingPublic Media, Uli Fricke, CEO of our member FunderNation and President of our Board, discusses the financing challenges facing innovative companies in Germany and the role private capital can play in supporting their growth. The interview followed Fricke’s participation in the Being Public Conference, GoingPublic Media’s capital markets conference, where this year’s programme included a panel discussion on Deep Tech companies and their path to the stock market.
Financing Innovation Beyond Early Stage
Fricke sees Germany’s challenge less in generating innovation than in financing companies once they begin to scale. At this stage, the technology has been validated, intellectual property and patent protection are in place, and the company has its first customers. From here, however, capital requirements rise significantly. This is particularly relevant for Deep Tech companies, which often need substantial and patient capital before reaching profitability. In the interview, Fricke points to figures showing that EU scale-ups raise around 50% less capital by their tenth year than comparable companies in San Francisco. More than four out of five EU scale-up deals involve a foreign lead or sole investor. The question, therefore, is not only how to foster innovation, but how to enable innovative companies to continue growing in Germany and Europe. For Fricke, this raises a broader question: how can Germany provide innovative companies with more of the capital they need to grow without becoming dependent on investors from outside Europe?
Mobilising Private Capital for Growth
Fricke sees considerable potential in mobilising more private capital. A substantial amount of private capital in Germany remains in current accounts, savings accounts and fixed-term deposits, while direct investment in companies still plays a comparatively limited role. Changing the perception of private investment in companies is also part of the challenge. The stock market is still sometimes viewed as a casino, while the term “risk capital” itself carries negative connotations. Yet this is precisely the kind of capital innovative companies need: capital that is willing to take risks while also creating opportunities. This kind of investment also requires an understanding of the risks involved. Fricke points to diversification as a way for private investors to spread risk across a portfolio. At the same time, investment decisions can go beyond financial returns: they can also support innovations that investors consider relevant. Deep Tech in particular has the potential to generate this kind of interest, especially in areas such as climate, energy, sustainability and mobility. Fricke says this was precisely the dilemma FunderNation was created to address. The platform enables private investors to participate in start-ups with relatively small amounts, build a diversified portfolio and, through their investment decisions, have a say in which innovations receive funding.
FunderNation: Connecting Companies and Investors
Digital investment platforms have become an important part of the start-up financing landscape. This is where FunderNation’s own experience comes in. The platform has been connecting companies and investors for more than a decade. Crowdinvesting, however, still faces an image problem. While failures tend to attract headlines, Fricke points to FunderNation’s ten-year track record to provide a broader picture. According to Fricke, FunderNation facilitated around EUR 20 million in financing in 2025, with companies raising an average of approximately EUR 1.5 million through the platform. Over the past ten years, 18,000 investors have invested a total of EUR 80 million. Around 75% invested in more than one company. According to Fricke, the weighted overall return of the portfolio was 15% per year, while 12% of investments resulted in a default.
FunderNation’s approach has also evolved over the past decade. Fricke points to the team’s background in traditional venture capital, its experience in selecting companies and its close contact with investors. Not all funding comes from the crowd: FunderNation has also built an active and growing network of business angels. These additional sources of capital are particularly relevant in the current market environment. Fricke points to significantly more difficult financing conditions for many start-ups and the recent record level of corporate insolvencies in Germany. Against this background, she argues that sources of capital such as FunderNation are becoming increasingly important. For Fricke, Germany already has both strong innovation potential and sufficient capital to build successful companies. The challenge is to bring the two together. Digital platforms such as FunderNation demonstrate how this can work on a smaller scale. Doing so, she argues, requires founders, investors and regulators to be willing to try new approaches – as well as trust in investors’ ability to make informed decisions.
