The German government’s new coalition agreement is being viewed critically in many quarters: too bureaucratic, too cautious, not bold enough. But if you don’t let yourself be led by the headlines, but take a closer look, you will recognize exciting impulses – especially for founders, investors and companies with innovative and growth ambitions.

Despite economic uncertainty, the government is committed to an economic policy strategy that enables investment in future technologies and aims to strengthen Germany as a location for innovation. This opens up new prospects for technology-driven industries and the M&A sector.

Three levers for take-off

The agreement lists several specific measures that are relevant for the start-up and innovation landscape:

• Capital offensive through the Germany Fund: A growth and innovation fund with a volume of at least 100 billion euros is intended to strengthen scale-ups and SMEs in particular.
• One-stop store for start-ups: In future, company start-ups should be possible digitally and within 24 hours – a long overdue step towards reducing bureaucracy.
• Promotion of security-related technologies: DefenceTech and dual-use innovations receive new impetus from government programs – with positive effects on strategic M&A transactions.

These measures create an innovation-friendly climate and open new scope for strategic participation and investments.

Deep tech: Germany’s underestimated strength

Despite its image as a digital laggard, a powerful deep tech ecosystem is developing in Germany. Hidden champions are driving forward real future technologies – internationally competitive and with enormous M&A potential.

Current highlights from German technology sectors:

Aerospace

• Isar Aerospace: Successful test of the “Spectrum” rocket – milestone for European space travel.

DefenseTech

• Helsing: € 450 million Series C – one of the highest valued DefenseTech start-ups in Europe.
• ARX Robotics: NATO funding for autonomous robotics platforms.
• Quantum Systems: Expansion through AirRobot takeover, Series B over EUR 100 million, production expansion in Ukraine.

Quantum computing

• Planqc: €50 million Series-A quantum computer based on neutral atoms.
• Terra Quantum: €75 million Series A for software solutions in quantum technology.
• Qruise: Optimization of quantum hardware – part of the Quantum Business Network.

GreenTech

• Enapter: Major order for modular AEM electrolysers (3 MW).
• Sunfire: €100m investment in high temperature electrolysis.
• Green Flexibility: Focus on circular economy and sustainable use of resources.

These companies exemplify a new generation of tech innovators – with scaling potential, international relevance and a high M&A affinity.

Making strategic use of location advantages

Germany offers the best conditions for sustainable innovation:

• 59,000 patents in 2024 – +4% on the previous year, mainly from the automotive industry.
• Highest STEM graduate rate in the EU – ideal talent pool.
• Strong funding landscape: SPRIND, IPCEI & initiatives for diversity in tech.

These factors form the basis for a sustainable innovation strategy – both for domestic players and for international investors.

M&A as a strategic growth driver

In several places, the coalition agreement creates framework conditions that favor M&A activities in the context of innovation and transformation. Technology-oriented companies in particular make targeted use of takeovers to:

• Gain access to new technologies and markets
• Expand business models
• accelerate international expansion
• Retain skilled workers in the long term

The decisive factor here is integration into a clear overall strategy – from the identification of suitable target companies to post-merger integration.

M&A highlight: Digitalization remains a deal driver

There are also strong movements in the tech M&A market beyond the big names – especially where digitalization is becoming a reality. A current example:

• Timetoact Group: The IT service provider specializing in digitalization, cloud and data analytics was acquired by H.I.G. Capital in March 2025. The private equity company is thus making a targeted investment in the German mid-cap tech sector – and sending a clear signal: Value is created where technology is scaled in a practical way.

The transaction exemplifies the ongoing trend of positioning high-growth IT companies with a clear technological focus as platform investments or add-ons – especially in conflict between SMEs and future technology.

Conclusion: Shaping the future instead of waiting

The coalition agreement offers more opportunities than it seems at first glance. Those who think strategically will recognize that now is the time to invest, to scale – and to actively shape innovation.

Recommendation: Don’t let opportunities pass you by. Innovation begins where capital, technology and smart decisions come together.