EIC Accelerator has set out six challenges worth €300M, on top of €375M for open calls in 2024 Here’s what it is asking of Europe’s tech start-ups and scale-ups
The European Innovation Council (EIC) will put €675 million into promising start-ups this year to support Europe’s technology sovereignty policy.
The budget is smaller than previous years, as EU recovery money runs out, but the ambition to cook up the next generation of European tech leaders isn’t waning, as geopolitical tensions run high.
The EIC’s promise is to bridge the valley of death European companies face in making the transition from academic lab to commercial enterprise, and the subsequent challenges of raising the capital needed to scale up. Europe has the talent and ideas, but its investors have a limited appetite for risk.
This push is driven by the political and economic realities - that a stronger technology base will mean less reliance on technology imports from China and the US, and therefore greater security. Europe wants to maintain its position on the global stage and technology plays a key part in this ambition.
As things stand, the EU is lagging behind the US and China in fields such as artificial intelligence and advanced microchips, and is fast losing out on more traditional industries, such as car manufacturing, where it was once a leader.
Technology sovereignty has been a key aspect of EU politics for some years now. Most recently, Belgium’s prime minister Alexander De Croo brought the topic to the forefront of his country’s current six-month stint leading the EU Council of member states.
The EU should “switch to a higher gear” to remain an “innovative, creative, capital-rich and productive continent”, De Croo said in a speech at the European Parliament marking the start of the Belgian presidency. “We need to go from invented in Europe, to developed in Europe, all the way to made in Europe.”
What does the EIC Accelerator do?
The EU runs myriad schemes that are designed to help the companies it backs beat global competition, from efforts to connect start-ups based on the research financed by Horizon Europe to the InvestEU programme, which provides long-term funding to innovative companies.
The EIC, a recent addition to the mix, aims to take good ideas and enable entrepreneurs to turn them into profitable companies. This involves three stages: giving researchers money to delve deeper into promising ideas through the Pathfinder; helping them navigate the move from academic lab to start-up with the Transition scheme; and financing start-ups and scale-ups through the Accelerator scheme.
The Accelerator which has the biggest share of EIC’s money, awards a combination of grant and equity funding, to help companies get started and to grow. It’s the only EU instrument that involves the Commission investing directly in start-ups.
To maximise the impact of the fund, the EIC has hired programme managers who analyse key tech sectors and set out the fund’s investment strategy. This is then translated into targeted calls, known as Challenges, which enables EIC to pool together companies innovating in each area and manage the portfolio.
The technology areas, overseen by 11 programme managers are: renewable energy; quantum technologies; responsible electronics; space systems and technologies; medical imaging and AI in healthcare; biotechnology; medical devices; green technologies; advanced materials for energy, architecture engineering construction technologies; and food.
The goal is to help create a critical mass of companies, in line with European policies for AI, health, renewables and semiconductors, among others. There is also a regulatory focus, with EIC programme managers talking to a variety of start-ups in the same field to uncover common issues they may encounter. For example, there are many rules around bringing a new food to the market, which the programme manager can help the of food start-up companies as a whole to group address.
Policy-specific calls
There are six Challenges, each of which have a budget of around €50 million. First-stage submissions are open all year round, with March and October deadlines for second-stage applications from those that pass the first round.
Artificial intelligence: this year’s AI challenge focuses on human-centric generative AI, where the EIC is looking for generative AI models that address the shortcomings of current models in their lack of transparency and trust. This ties in with the EU’s ambition to set standards for safe AI that benefits humanity, in line with first-ever legislation on AI the bloc recently adopted.
Virtual worlds and Industry 5.0: the EIC hopes to help scale up mainstream uses of virtual worlds, using Industry 5.0 human-centric principles. This involves applying using virtual worlds technology to enable industry to do better with less, whilst working for the people. This includes upskilling, resource efficiency and lower carbon emissions. The policy approach lies in the European Commission’s Web 4.0 and virtual worlds strategy from July 2023.
Quantum chips: the EIC wants to foster development of novel semiconductor components and integrated smart systems for next-generation edge devices. The hope is to boost the EU's global share of chip production, which will enable a new generation of smart devices.
The EU is devoting attention and funding to increasing domestic chip production after the COVID-19 pandemic revealed how dependent the bloc is on imports. This includes investing €11 billion by 2030 in a Horizon Europe partnership with EU member states and the private sector.
Food: here the focus is on producing food through precision fermentation methods and from algae, to help decouple food production from the soil and environmental conditions. The EIC is looking for breakthroughs here, because incremental changes in the food system will not move the dial enough for Europe to meet its green goals, and traditional agriculture won’t either. The ambition is anchored in the EU’s Farm to Fork strategy and feeds into the Horizon Europe Soils Mission.
Health: the EIC is looking for monoclonal antibody-based therapies to help combat future epidemics. It also wants to foster development of methods for rapid detection and analysis of virus variants, and the development of technology platforms from which treatments for a range of diseases can be developed. This is intended to support other EU initiatives in health, such as the Health Emergency Preparedness and Response Authority (HERA) Incubator.
Energy: there are grants and equity for scaling up renewable energy sources and the associated supply chains, while limiting the EU’s dependency on imported critical raw materials and other key components. The aim is made in Europe renewable energy. The goals of the EU’s net-zero industry and critical raw materials acts provide the policy context.
The prize fund
For 2024, EIC will have a budget of €1.2 billion to be spent through the Accelerator, Pathfinder and Transition schemes.
Of this, €675 million will go to the EIC Accelerator, with €405 million is earmarked for equity investments and €270 million for grants. Another €180 million has been set aside to make follow on investments in companies EIC invested in previously.
Between Challenge and Open calls, the respective budgets are €300 million and €375 million. The open calls are for any company that fulfils the EIC’s big mission to scale up European tech start-ups.
How much support can you get and how?
Each company can receive up to €2.5 million in grants and up to €15 million in equity.
Getting to the money is a three-step process. In the first stage, the EIC wants to see a 5-page form summarising the proposal, a pitch-deck of up to ten slides in pdf format and a video pitch of up to three minutes. You can expect feedback within four weeks. If three out of four remote evaluators give you the nod, you will be invited to submit a full proposal at Stage 2.
The Stage 2 application is lengthy, with up to 12 months to prepare and submit by one of the cut off dates. It’s a Horizon Europe-style application with a myriad of questions about the project that many say takes a while to fill out.
This year, the EIC has introduced lump sum funding, which means you’ll need a sound financial plan to win a grant. Once you get the money, there are no longer any reporting requirements, but to give start-ups the freedom, the EIC will want to see a very clear plan for how the money will be spent.
Experts say start-ups may struggle to fix budgets in advance and then meet expectations. At this stage, it’s unclear how flexible the Commission will be and whether evaluators, who will now be responsible for determining if budgets make sense, will have the right training to understand costs.
Those that pass the second stage will then be invited to interviews with the EIC jury, where the final decision will be made.
First step applications can be submitted any time. Second stage deadlines are 13 March 2024 and 3 October 2024. Third stage interviews will take place between 10 - 14 June 2024 and 13 - 17 January 2025.
Once you win the funding, the story isn’t over. The grant component is relatively easy but to get equity you’ll almost always need a lead investor, with the EIC contributing its share once you find one.
The track record
Success rates for the Accelerator are as low as 2%, according to innovation consultants, and usually average around 5%. For a June 2021 call, the success rates were 67% for stage 1, 16% for stage 2 and 50% for stage 3, according to Segler Consulting. That’s 5.4% overall. Average rates are hard to estimate, but these 2021 figures are indicative.
It’s also a lengthy process. The second application stage form is very specific and some consultants estimate entrepreneurs may need to dedicate 300 – 400 hours to getting the funding.
This year, competition is likely to be even more fierce, with the budget falling by nearly half, from €1.13 billion to €675 million. Consultancy Lira estimates 108 start-ups will be funded, down from 223 in 2022.
Who usually gets lucky? Health tech companies usually take the lead, but engineering and tech-based companies do well too. In the last call of 2023, they made up a fourth of the winners, with health tech at 30%.
In terms of geography, entrepreneurs in leading Horizon countries do well, with the likes of Spain, Germany, France and Italy winning the most bids. UK companies, despite not being able to access equity funding, are also major beneficiaries, coming in fifth.
You can find more stats on the EIC data hub.
Find out more
- EIC work programme 2024
- A recording of the EIC 2024 info day for applicants
- A recording of the info day sessions on the EIC Accelerator challenges
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