EU to launch multi-billion euro tech fund this autumn to retain startups

The European Union is set to initiate investments from a new multi-billion euro fund for technology companies this autumn. The primary goal of "Scaleup Europe" is to counteract the trend of European startups relocating outside the continent as they scale up their operations.

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Europe has everything necessary to lead in science and technology, but unfortunately, when our startups enter the expansion phase, many leave Europe.

Ekaterina Zaharieva, the European Commissioner for 'Startups, Research and Innovation,' stated that Europe possesses the necessary elements for technological leadership but acknowledged that many promising startups leave when they reach the expansion phase. The Scaleup Europe fund is designed to support these high-potential European companies in strategic technological fields, including artificial intelligence, quantum technologies, semiconductors, robotics, autonomous systems, energy technologies, space technologies, biotechnology, medical technologies, advanced materials, and agricultural technology.

The European Council's innovation arm, EIC, selected the global investment firm EQT in May to serve as the investment advisor and manager for this 5 billion euro initiative. Zaharieva highlighted that European startups face significant hurdles due to market fragmentation and an incomplete capital market, resulting in seven times less access to capital compared to U.S. companies. This often leads to acquisitions by American or Asian investors.

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We cannot wait for the single market for capital, we simply cannot wait until 2028, we must act now.

"We cannot wait for the single market for capital, we simply cannot wait until 2028, we must act now," Zaharieva urged. She confirmed that the fund is operational and will begin making its first investments in the fall. This public-private fund will operate under market conditions, collaborating with existing initiatives in member states like France, Germany, and Nordic countries, often in partnership with the European Investment Bank.

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This is a public-private fund that will operate under purely market conditions.

Zaharieva also pointed to the EIC's success in attracting 3.45 euros in private investment for every euro of public funds. She concluded optimistically, noting that with 5% of the world's population and 25% of its researchers, Europe has the potential to lead in technology. "Of course, we have challenges, but the good news is that the recipe is clear. If governments, the private sector, and the European Commission do their job, instead of just complaining, the situation can change very quickly."

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Of course, we have challenges, but the good news is that the recipe is clear. If governments, the private sector, and the European Commission do their job, instead of just complaining, the situation can change very quickly.