Platform ‘is not accessible anymore as of today, due to a contractual dispute’, the Commission announced on 2 June. Start-ups are happy to see the complex submission process go – but question closing it five days before a call deadline
The European Innovation Council’s (EIC) bespoke submissions platform for start-ups applying for grants and equity has been shut down with no prior warning. The Commission has blamed a contractual dispute but provided no further explanation.
As an “emergency measure” submissions to the €7 billion EIC Accelerator programme have been transferred to the general Horizon Europe Funding and tenders opportunities portal.
The move has required the EIC to restructure its application forms to fit the traditional R&D grant proposal format used in the Horizon Europe portal. Start-ups that are in the second stage of applying for grants and equity will need to transfer it to new applications forms, while those in the first stage of applying to the accelerator won’t be able to submit applications until a new IT platform is put in place. The Commission estimates this will be in early July 2023.
Many are happy to see the old platform go – it has been plagued by various shortcomings and was often said to lack quality – but the abrupt communication threw many off kilter just a few days before an EIC Accelerator call deadline on Monday, June 5.
This deadline has been postponed by two weeks to give applicants extra time to deal with the change.
The bespoke EIC Artificial Intelligence Platform was designed to allow the submission of Accelerator proposals, for which the existing Commission IT tools were not suitable. It was the first platform to allow the submission of business plans to a Commission programme for evaluation, and to provide an AI-based self-diagnostic tool for applicants.
However, there has been a large amount of negative feedback about the length and complexity of the process, the lack of integration/interoperability with other widely used platforms, redundant or missing information, and technical shortcomings.
Emmanuele Angione, managing partner at the innovation consultancy Lira, says axeing of the platform is welcomed by both companies and consultants, who now hope for an improved submission process.
“It came as no surprise to see [the AI] platform discontinued, however, to do that five days before the June cut-off deadline was not ideal,” said Angione. “All the stakeholders now expect more transparency on what to expect for the last cut-off of 2023 and the next four years.”
David Arias, start-up and funding adviser at Strata, says companies are surprised and frustrated. “No one expects this kind of last-minute radical change from a European organisation. Some founders think it is really striking that start-ups are requested to make such long-term plans for the application while the EIC seems to be unable to make proper annual plans,” he said.
“The EIC must be aware that start-ups put a lot of resources and effort into these applications and therefore should plan and communicate properly any change in the application process or deadlines with much more anticipation,” said Arias.
The EIC AI platform was custom-made for the EIC Accelerator, the €1 billion a year funding scheme that provides European companies with combined equity and grant financing, in an attempt to supercharge innovation and help start-ups scale up.
The platform was developed by the Innovation Loop, a company set up in 2017 by Marc Loher, a former R&I consultant, who worked for the Commission’s research directorate for six years until 2003.
Innovation Loop was selected to run the project in 2020 ahead of the EIC’s 2021 launch as part of the €95.5 billion Horizon Europe research programme. All this happened “in a very short period of time to accommodate new features,” the Commission says. At this time, the application process that had been used in the earlier pilot of the Accelerator was revamped to fit the platform.
Angione said the design of the platform had major issues from the start and was badly designed.
Arias is less critical, but says that while the platform was functional, some questions were confusing and repetitive, requiring a lot of time and effort to answer.
The complaints were bad enough that the EIC Board of experts appointed to help the Commission steer the strategy of the fund, published a statement in March calling for a major improvement.
This is not the first problem the EIC has run into. After launching with great fanfare in spring 2021, the EIC Accelerator failed to get its much-advertised novel equity funding out to selected start-ups until late 2022. That was because of an internal row in the Commission over the lack of internal expertise in conducting due diligence and the greater risk attached to making equity investments as opposed to awarding grants.
For a while the problems held up grant financing that accompanies equity, leaving cash-strapped companies in a dire situation.
After much bargaining within the Commission, the funds were finally unlocked when an external fund manager, Luxembourg-based AlterDomus, was picked to oversee the equity investments.
In a more recent change, the Commission moved part of the EIC management in-house, away from an executive agency. That followed months of rumours that the Commission wanted to tighten its grip on the fund.
The EIC Board wants the major improvement of the platform to include more user friendliness so that applicant companies can complete submissions with a proportionate amount of time and effort and without the support of external consultants; and for information prepared for the EIC submission to be reusable for other purposes, such as seeking private investment, and vice versa, so that information prepared for pitching to private investors can be reused for EIC submissions.