This case study was compiled based on desk research – including the Sovereign Tech Fund webpage, related news items and articles – as well as an interview conducted by the OSOR team with Mirko Swillus, Head of the Sovereign Tech Fund. 

The European Union is increasingly embracing open source software as a strategic asset, linking it to innovation, collaboration, and digital sovereignty. Notably, the European Commission’s Open Source Software Strategy 2020-2023 champions a “Think Open” approach within EU institutions and calls for “targeted public funding”[1] to sustain critical open source projects​. 

The commitment to open principles is mirrored in Germany’s national strategy. The German federal coalition agreement of 2021 explicitly prioritised strengthening open source to advance digital sovereignty, endorsing the principle of “public money, public code.” Moreover, amendments to the Online Access Act introduced the requirement for public administrations to give preference to open source and open standards in IT procurement - a measure aimed at fostering transparency, interoperability, and reuse.

In this evolving landscape, the Sovereign Tech Fund represents a leading initiative. Launched in 2022, it translates high-level policy into targeted public investment, funding critical open source software infrastructure that underpins digital services in both the public and private sectors.

The Sovereign Tech Fund (hereafter also referred to as “the Fund”) is a public investment initiative launched by the German Federal Ministry for Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz, BMWK) and implemented by the Sovereign Tech Agency, a public entity established as a subsidiary of the German Federal Agency for Disruptive Innovation (Bundesagentur für Sprunginnovationen, SPRIND). 

Its main goal is to strengthen digital sovereignty by supporting the maintenance of open digital base technologies - foundational open source components such as libraries, protocols, and development tools - that, despite their widespread use across sectors, often receive little investment. By providing targeted support to enhance the security, maintenance, and resilience of such projects, the Fund helps ensure their continued availability and reliability for all users.

Since its establishment in 2022, the Sovereign Tech Fund has provided over €24.6 million in funding to support more than 60 open source projects globally. Operating under German public procurement law, the Fund demonstrates an innovative model for public sector investment in open source.

The Fund provides financial support to recipients through stipulated contracts, with funding disbursed in stages according to the completion of agreed project milestones. The minimum amount per project is €50,000, with no fixed upper limit; in practice, investments have ranged up to €1 million. 

To be eligible for funding, projects must focus on open digital base technologies such as software libraries, protocols, development tools, and related infrastructure. Code must be released under licences approved by the Open Source Initiative or Free Software Foundation, and documentation under Creative Commons-style licences (excluding “non-commercial” or “no-derivatives” clauses). Projects already receiving public funding for the same activities are ineligible. The Fund is open to applicants from all over the world, and submissions must be completed in German or English via the official application portal.

Proposals are evaluated against six criteria: 

1. Prevalence (use for/within other technologies),

2. Relevance (significance across sectors such as industry, healthcare, and education),

3. Vulnerability (level of underfunding),

4. Public interest,

5. Proposed activities, 

6. Expertise of contributors. 

The selection process involves an initial screening, a scoping phase to refine deliverables and budget, and an external expert review before final decisions are made. Each funded project is assigned a programme manager who conducts onboarding, monitors progress, and reviews deliverables. Project progress reporting is designed to be lightweight, with flexible formats accepted for updates, including links to repositories. At the conclusion of the contract, recipients must submit a final report detailing completed work, challenges encountered and planned next steps. Project outcomes are primarily evaluated on the strategic impact of the work, with emphasis on security and maintainability.

The Sovereign Tech Fund introduces two notable innovations to the way public institutions support open source software. First, it shifts the focus of public funding away from innovation and prototypes toward the long-term maintenance of open digital infrastructure. The technologies supported by the Fund operate below the application layer and are thus difficult to monetise through conventional means. By targeting the underfunded infrastructure layer, the Sovereign Tech Fund therefore addresses a critical gap in the sustainability of open source ecosystems.

Second, the Fund operates under German public procurement law. This model is unprecedented in the open source field and demonstrates how public sector instruments can steward digital commons. Importantly, despite being backed by funding coming from German taxpayers, the Sovereign Tech Fund has a global mandate, supporting cross-border collaboration in the open source ecosystem.

The Sovereign Tech Fund was conceived in response to growing concerns over the fragility of critical open digital infrastructure. In their 2021 coalition agreement, Germany’s governing parties pledged to financially back open source​. This commitment gained urgency after events like the  Log4j security flaw, which highlighted how a bug in a volunteer-maintained software library could destabilise governments and companies worldwide​. Open source advocates argued that the government should treat this “invisible” software infrastructure as a public good – as essential as roads or bridges – and invest in its upkeep. This led the German Federal Ministry for Economic Affairs and Climate Action (BMWK) to commission a feasibility study, which confirmed significant deficits and potential in supporting open digital base technologies and recommended the creation of a dedicated fund​.

• Mid-2022 – In the final 2022 budget negotiations, the German Parliament (Bundestag) allotted seed funding for €3.5 million per year to the Sovereign Tech Fund. Following funding approval, the entity was set up within the SPRIND as a pilot initiative. 

• October 2022 – The BMWK officially announced the launch of the Fund’s first funding round​.

• Mid-2023 – The federal budget for the Fund increased to €11.5 million.

• Late 2023 – By late 2023, over 40 critical open digital base technologies had received the Sovereign Tech Fund’s support​. After a successful first year, the German government decided to institutionalise the Fund for the long term, establishing it as an independent entity under SPRIND​. 

• 2024 – The Sovereign Tech Agency was formally set up as the administrative entity of the Fund, allowing it to gain more independence. With an increase in budget allocation to €17 million, by late 2024, the Sovereign Tech Fund had invested approximately €23.5 million in over 60 open source projects​.

Figure 1: Examples of current projects supported by the Sovereign Tech Fund. Source: Author’s elaboration based on https://www.sovereign.tech/tech.

The Sovereign Tech Agency, a subsidiary of SPRIND, administers the Fund. The Agency is governed by a Supervisory Board that provides oversight and strategic guidance to ensure operations align with its public mandate​. Day-to-day operations – such as selecting the projects to fund – are handled by the Fund’s executive team, with the support of a network of external experts from the industry and the open source community. The Fund’s team also relies on Sovereign Tech Agency staff for activities related to project management and administration, legal counsel, and communications​. 

In terms of financing, the Sovereign Tech Fund is entirely publicly funded. Every fiscal year, the Bundestag must approve budget allocations under the dedicated standing item of the BMWK/SPRIND federal budget. This budget has grown significantly over the years, from €3.5 million in 2022 to a projected €17 million in 2025​​. A dedicated two-year contract with the BMWK secures the Fund’s continuity beyond annual budget cycles and affirms its strategic importance. Internally, the Sovereign Tech Fund invests in metrics and research to demonstrate its impact. By documenting positive outcomes – such as improved security in widely used software or reduced vendor dependencies – the Fund aims to secure sustained or increased funding in future years. 

As of 2025, the Sovereign Tech Fund is entering a phase of strategic development. A key near-term milestone is the confirmation of its annual budget, currently under negotiation within the new German government coalition. Internally, the Fund aims to expand and reorganise its team within the Sovereign Tech Agency to better manage its growing portfolio. On the external side, the Fund is seeking to strengthen its outreach strategies, with the goal of proactively identifying gaps in the open source infrastructure ecosystem and projects that may not reach through the standard application process. Complementing this scaling effort, an ongoing evaluation of both the Sovereign Tech Fund and the Sovereign Tech Agency is underway to enable continuous learning and improvement.

In parallel with its core activities, the Fund is exploring future collaboration with the German industry to diversify its sources of funding, and with ZenDiS - the German Centre for Digital Sovereignty - to better target open digital infrastructures that answer public sector needs.

Finally, at the EU level, a strategic priority for the Fund is to position itself as a reference model for open source funding. Cross-border knowledge exchange is expected to intensify in 2025, as the European Union increasingly seeks to reduce reliance on non-European technology providers. There is also growing interest in the Fund’s approach among other Member State governments and EU institutions.

The Sovereign Tech Fund brings about important benefits to the German public administrations. By enabling the public sector to engage directly within the open source ecosystem, it strengthens the role of public administration as an active stakeholder rather than a passive user of open source. Moreover, it helps public institutions better understand the technologies they rely on and enables them to shape their development in ways that align with public needs.

At the same time, the Fund faces several challenges. Although it operates under a two-year agreement with the BMWK, its financing still depends on annual budget negotiations in the German Parliament. This creates a degree of financial uncertainty and limits the Fund’s ability to make longer-term commitments. This is compounded by the volatility of policy focus: as attention shifts toward emerging topics like artificial intelligence (AI), there is a risk that open source digital base components - including the libraries and tools AI systems rely on - may be overlooked. Finally, public procurement law also presents practical challenges. Current frameworks tend to prioritise price as the main award criterion, which does not fully capture the broader value of open source, such as improved transparency, reusability, and the potential to reduce vendor lock-in.

Addressing these issues will be key to ensuring the Sovereign Tech Fund’s continued ability to support open source as a strategic asset for the public sector and beyond.

The successful establishment and operation of the Fund have been supported by a set of well-defined good practices. A key factor has been its iterative working approach — starting with small-scale pilots, working in cycles, and incorporating regular feedback — which has enabled the Fund to remain agile. Equally important is its ongoing engagement with the open source community. By actively reaching out to maintainers and contributors, the Sovereign Tech Fund has gained a deeper understanding of the real challenges faced by the ecosystem and to discard assumptions that do not reflect its diverse realities. A clear understanding of the complexity, decentralisation, and cultural diversity within the open source community has been critical to shaping appropriate funding strategies.

For information regarding the policy context of the use of open source software in the public sector in Germany, please consult the respective Country Intelligence Report on open source software policies and its corresponding factsheet in the OSOR Knowledge Centre. It includes a detailed overview of the political actors, strategic players, political and legislative initiatives, and public sector open source software initiatives in Germany.

[1] European Commission (2020). Open Source Software Strategy 2020-2023. Page 10. https://commission.europa.eu/about/departments-and-executive-agencies/digital-services/open-source-software-strategy_en.