EIB launches fund of funds for European tech champions

• European Tech Champions Initiative (ETCI) will back high-tech companies in their late-stage growth phase.
• ETCI will help plug financing gaps and thus reinforce Europe’s strategic autonomy and competitiveness.
• The new Fund of Funds has secured initial commitments of €3.75 billion from EIB Group, Spain, Germany, France, Italy and Belgium.
• The size of the fund is expected to grow further with future commitments.

Five EU Member States and the European Investment Bank Group (European Investment Bank, European Investment Fund) have signed today the European Tech Champions Initiative (ETCI) mandate, a Fund of Funds that will channel much-needed late-stage growth capital to promising European innovators.

ETCI will deepen Europe’s scale-up venture capital (VC) markets by bridging gaps in financing availability, especially for companies seeking to raise amounts of over €50 million. It will help create an asset class for European institutional investors to diversify their portfolios, thus maintaining a continuous flow of funding to European scale-ups. Such positive self-sustained dynamic in the European high-tech landscape will nurture home-grown innovation and entrepreneurship.

Europe’s tech start-ups often do not have sufficient capital to compete on a global scale and are pushed to relocate overseas. Closing this scale-up gap could create a large number of highly skilled jobs and boost growth.

ETCI – the cornerstone of the Pan-European Scale Up Initiative, which was unveiled in February 2022 in Paris during a summit organized under the French Presidency of the Council of the EU – will pool public resources from participating Member States and the EIB Group to make significant investments into large-scale Venture Capital funds, which will in turn provide growth financing to European tech champions.

Managed by the European Investment Fund, ETCI has secured commitments from Spain (€1 billion), Germany (€1 billion), France (€1 billion), Italy (€150 million) and Belgium (€100 million) during the initial subscription period. The EIB Group has deployed additional €500 million, thus bringing the grand total to €3.75 billion at this stage. The size of the fund is expected to grow further with future commitments.

“This initiative is a striking example of what we can achieve collectively to strengthen economic and industrial sovereignty in the European Union. EU technology companies will thus contribute further to innovation, growth and job creation, and therefore to the economic, social and environmental future of the European Union,” said France’s Economy, Finance, Industrial and Digital Sovereignty Minister Bruno Le Maire.

“This initiative will provide the most innovative start-ups with the capital they need to scale and lead the global entrepreneurial ecosystem,” Nadia Calviño, Vice President of Government of Spain and Minister for the Economy and Digital Transformation. “Start-ups are a key asset of our strategic autonomy and with this agreement we will contribute to strengthen it. It is an investment in our future.”

“Europe is already home to world-class companies and industries with access to solid technical and financial infrastructures. To enable future European tech champions to play an equally significant international role and to boost Europe’s global competitiveness, we need to go one step further,” Christian Lindner, Germany’s Federal Minister of Finance said. “With the European Tech Champions Initiative, we are now filling a gap in the financing landscape and strengthening Europe’s strategic autonomy."

“We share this initiative in which Europe works in synergy to mobilize public and private capital in order to support the growth of future champions of digital innovation,” said Giancarlo Giorgetti, Minister of Economy and Finance of the Italian Republic. “We hope that Italy, which has always been one of EIF’s main partners, will be able to draw from this project the right impulse for the development of this business sector.”

“Belgium welcomes the pan-European investment strategy implemented by the European Investment Fund and is delighted to be able to contribute to new developments in the technology scene,” said Belgium’s Finance Minister Vincent Van Peteghem.

“Innovative businesses need to be able to find the equity capital they need right here in Europe” Marjut Falkstedt, Chief Executive of the EIF said. “As manager of the ETCI, we will be using our scale and expertise to nurture a sustainable late-stage growth ecosystem capable of supporting homegrown innovation.”

“Offering support to Europe’s innovative firms in their late-stage development, when they want to scale up their business, is essential for safeguarding the EU’s strategic autonomy,” EIB Group President Werner Hoyer said. “Europe has strong innovators, but it needs to improve the environment for companies to transition from start-up to credible competitors and market leaders. ETCI highlights our commitment to financing innovation and the rollout of technologies that will help secure a sustainable future for Europe.”

About the EIF

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments, which specifically target this market segment. In this role, the EIF contributes to the pursuit of key EU policy objectives such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability and more.

This article was first published on 13 February by EIB.