Under a new programme dubbed the "WIN" initiative, Berlin secured financing pledges of up to 12 billion euros ($13 billion) by 2030 from investors to support the start-up environment in Europe's largest economy.
The declaration - signed by the government, public lender KfW, business groups and companies such as Allianz, Commerzbank and Deutsche Bank - pledges to make it easier for start-ups to get the funding injections they need to grow their business.
Start-ups need "better financing options" so they can scale up in Germany and Europe instead of having to relocate to places like the United States to raise capital, Chancellor Olaf Scholz said.
The German initiative will "mobilise private investment in venture capital, start-ups and innovation technologies", Scholz said.
"Strengthening our competitiveness and technological sovereignty is of central importance" at a time of shifting geopolitical relationships, he added.
Finance Minister Christian Lindner said the government had to create the right conditions for companies to thrive, without resorting to "ever more subsidies".
"Only if we succeed in mobilising more private capital will we create additional growth," he said.
Nearly 1,400 start-ups were founded in Germany in the first half of 2024, a 15-percent increase on the preceding six months, according to government figures.
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The German scheme is similar to the "Tibi" initiative launched in France in 2019 to boost financing for tech start-ups.
It came as Berlin was named the fourth-best city in Europe for entrepreneurs to live in, according to a new study.
The report by SumUp looked at which European cities offer a thriving environment for business owners, analysing taxes, quality of life, internet speeds and networking opportunities.
SumUp said the entrepreneurial spirit in Berlin is "evident" because it's already home to a whopping 26,500 millionaires.
"Berlin, known for its history and landmarks, offers a prime environment for entrepreneurs in technology and creative industries," said the study.
Researchers found the 'business survival rate' in Berlin was 74.86 percent.
Meanwhile, London took the top spot for entrepreneurs to live in despite the high cost of living followed by Paris and Amsterdam.
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