The European Innovation Council Equity Fund for high-impact innovation becomes an official entity
The European Innovation Council Equity Fund for high-impact innovation, has become an official entity. The EIC Fund will provide equity from €0.5m to €15m to breakthrough innovation companies selected for EIC Accelerator blended finance support (grant and equity). The EIC Fund fills the funding gap at the start-up stage where the EU venture capital market underperforms compared to the global venture capital market. The European Investment Bank will manage the ownership stakes of the European Commission, who has, through this endeavor, made direct equity investments in companies for the first time.
This is the first time the European Commission will make such direct equity investments in companies, with ownership stakes expected to be in general from 10% to 25% in start-up companies. Since the start of the EIC Accelerator Pilot in the autumn of 2019, a total of 102 start-ups and SMEs active in all technology intensive sectors (health, digital, energy, etc.) have been pre-selected for equity financing for a total of nearly €400m to support their scale-up. Further companies will be preselected by the EIC Accelerator Pilot in July (in Green Deal areas) and November. These companies are being subject to due diligence by the European Investment Bank (EIB), which acts as the investment Advisor to the EIC Fund.
From 2021, the EIC Fund will be financed by the EIC to be established under Horizon Europe – the EU Research and Innovation Framework Programme (2021-2027).
From 2021 the EIC Fund will be financed by the EIC via Horizon Europe, the next R&I framework programme.
Depending on the demand and quality of proposals, it is expected that at least one third of the EIC budget, currently proposed at €10bn, will be in the form of equity managed by the EIC Fund. Furthermore, the EIC Fund will increase financing for high-impact innovation by crowding-in private investment, co-investing with venture capital funds, national promotional banks, corporate venture funds and other private investors.
In addition to equity funding, EIC Accelerator-supported companies receive grant funding of up to €2.5 million and have access to mentoring, business coaching and matchmaking with investors, corporates and likeminded entrepreneurs.
How can you get involved?
Are you a private investor seeking future innovation breakthrough to invest in, together with the European Innovation Council (EIC)? The EIC Fund will manage the equity investment, offering the opportunity for private investors to co-fund in highly innovative companies.
Co-investing in companies carefully selected by the European Innovation Council (EIC) is a great investment opportunity as well as an opportunity to support breakthrough, market-creating innovations across Europe and beyond.
