EU Member States and a funding group launch a new fund in favour of European tech champions

The ECTI fund became the “cornerstone of the Pan-European Scale Up Initiative”, which was unveiled in February 2022 in Paris during a summit organised under the French Presidency of the Council of the EU. So far, the project includes Germany, France, Spain, Italy and Belgium. The ECTI aims at helping European high-potential start-up companies raise funds necessary to ensure better competitiveness at international scale.

Funding in the frame of a European ecosystem

In 2022, Member States of the EU have launched the Pan-European Scale Up Initiative to channel much-needed “growth financing to European tech champions in in their late-stage growth phase”. According to the EIB, this is the time when companies “want to scale up their activities and leave the category of start-ups to reach a more advanced development stage”.

In these particular stages, says the EIB, companies looking for funding “need to raise funds higher than 100 million euros on private markets”. But since European funds specialised in this segment are not abundant, companies “struggle to launch their projects” or “are forced to look for capital outside Europe”. This is why Member States have decided to develop a European ecosystem for the last cycles of investment through this initiative of European tech champions.

Practical support in strategic industries

In the presentation of its project, the EIB details several support focuses for these innovative companies. The participation of the EIB Group in the initiative could take the following forms:

- a role of advisor, manager and administrator of “fund of multi-investors fund” specialised in the last stages of growth;

- a financial contribution to the ECTI;

- in specific cases, additional support to European companies in line with the scheme.

The support of the European Investment Bank Group to the Scale-up Europe initiative relies on its “sound experience in terms of creation of financial ecosystems, particularly venture capital funds and funds of funds, and direct injection of investment seed loans to companies”, and especially in strategic industries such as clean technologies, biotechnologies and digital innovation.

French contribution to protect European sovereignty

While at first the EIB Group will engage capital up to 500 million euros and the formation of venture capital up to 3.75 billion euros, the French ministry of economy announced that French contribution to the ECTI will be up to 1 billion euros.

For France, this initiative is a “striking example of what we can achieve collectively to strengthen EU’s economic and industrial sovereignty”, said the French minister of economy, adding that “in doing so, European technology companies will contribute further to innovation, growth and job creation, and therefore to the EU’s economic, social and environmental future”. And the minister in charge of digital transition thinks that this initiative of European Tech Champions “marks a critical step for the development of venture capital funds” in the EU. “We want our companies with strong growth potential to be well-funded in Europe” concluded the minister.

More to read

• Website of the French ministry of economy
• European Investment Bank website