With this new fund, which also involves major private players, the European Union aims to better retain its deep-tech innovators within its borders.
1.4 billion euros. That is the amount recently allocated by the European Commission to its financial arm, the European Innovation Council (EIC). The goal is to support the most promising deep-tech players in Europe through support programmes, but above all through significant capital investments.
Responding to the recommendations of the Draghi report and drawing on this amount, the Commission has launched a new fund called Scale-up Europe, with several billion euros at its disposal. For Frederik Tibau, Digital Innovation & Growth Expert at Agoria, this can only be a first step. ‘When you compare the resources of this fund – around 5 billion euros – with the amounts invested in scale-ups in China or the United States, there is still room for improvement,’ he points out.
European ideas, foreign investors
If Europe has fallen behind its major competitors in this area, it is partly due to more timid public policies, but also to a much less developed venture capital culture. In fact, according to the Draghi report, the share of global venture capital funds raised in the EU is only 5%, compared to 52% in the United States, 40% in China and 3% in the United Kingdom.
Furthermore, innovative scale-ups in the EU are now largely financed outside its territory. ‘This is also the case in Belgium,’ points out Frederik Tibau, highlighting a paradox. For promising start-ups seeking seed or launch capital, the local ecosystem offers a wide range of investors. However, as soon as the amounts reach 50, 100 or 150 million euros (Series B, C and beyond), ‘companies almost automatically have to look abroad, particularly to English-speaking or Asian players,’ he says.
Anchoring innovation in Europe
Ultimately, whether through initial public offerings or listings on non-European markets, mergers and acquisitions, or investor equity stakes, the share of non-European buyers of EU companies now exceeds 60%, according to the Draghi report. This could eventually lead to the relocation of the headquarters of European gems or a large part of their activities outside the EU, preventing the old continent from taking full advantage of the benefits of innovation. ‘While companies must remain free to seek the best financing options, Europe must nevertheless offer them, and investors wishing to withdraw from them, adequate financial conditions,’ the authors explain.
‘Message received,’ seems to be the European Commission's response. Previously focused on investments capped at 10 or 30 million euros depending on its various compartments, the EIC will now be able to make direct investments of up to 100 million euros thanks to this new scale-up fund. These are very large sums, but they are necessary for the development of truly disruptive technologies emerging from laboratories and applicable in areas considered strategic by the European Union. These include, of course, AI, but also quantum technologies, semiconductors, energy, agriculture and space. ‘Not to mention biotechnology, medtech, robotics and advanced industrial systems, all sectors in which Belgium has a number of leading players,’ notes Frederik Tibau.
Private players
The Commission is not embarking on this new project, which is similar to a private fund, alone. For every billion euros of public money invested, it initially plans to attract at least two billion euros from its private partners. Among the major players expected to come on board are the European Investment Bank, Novo Holdings, the Danish investment and export fund EIFO, CriteriaCaixa, Santander/Mouro Capital, Fondazione Compagnia San Paolo, Intesa and Cariplo.
All intend to act quickly and have set spring 2026 as the target date for making their first investments. In addition, the Fund will select and appoint a management company to implement it through a public call for tenders. ‘This private sector management is crucial, as fund administration by public authorities is often synonymous with bureaucracy and delays. There are several candidates, including Scandinavian fund managers,’ explains Frederik Tibau.
It should also be noted that among the stakeholders in the Scale-Up fund is the Dutch pension fund ABP. This is a sign of hope in itself. ‘In addition to adequate public resources and the creation of a single capital market, the third major challenge is to attract resources from large European institutional investors,’ explains Frederik Tibau. Even if the latter are traditionally more defensive than their US counterparts, wouldn't it be better, for obvious reasons of sovereignty, for them to be the first to finance deep-tech innovation “made in the EU”?
For companies in Brussels as well
Scale-up Europe is a useful addition to the other tools managed by the EIC, whose advisory board includes Bart Becks, a veteran of the Belgian tech scene. Its flagship programme is the EIC Accelerator, which combines investment aid of up to 10 million euros per company. STEP, another programme, provides equity funding of up to 30 million euros, enabling the most innovative companies to expand their activities significantly. Their resources have also recently been increased.
However, the EIC Accelerator selection process remains very rigorous. Only 4% of applications are accepted, including several Brussels gems such as medtech companies moveUP and Axiles Bionics. For those who also dream of counting the fund among their shareholders, the EIC Summit, open to all, on 3 and 4 June at Tour & Taxis is an event not to be missed