EIF starts €15bn fund-of-funds for scaling European tech companies

The focus is on both mid-sized funds, with target volumes between €300 million and €600 million, and so-called mega-funds exceeding €1 billion. A first close is planned for the summer. The objective is to reduce the persistent funding gap in Europe’s scale-up segment, which is estimated at around €70 billion compared with the United States.

The new vehicle represents the second generation of the European Tech Champions Initiative (ETCI), launched in 2023. Its first iteration had a volume of €3.9 billion and supported 14 large venture capital funds, which have so far financed around 40 companies, including several unicorns.

Attracting new players

In contrast to the initial phase, the investment approach is now being significantly broadened. In addition to large funds, there will be a stronger focus on supporting mid-sized vehicles in order to achieve wider geographical coverage across the EU. While established markets such as Germany and France already have well-developed scale-up financing ecosystems, other countries still lag behind.

At the same time, the investor base is being expanded. Alongside public institutions, greater emphasis will be placed on attracting institutional investors such as insurers, banks and pension funds. The European Investment Bank and the EIF have already committed €1.25 billion.

In the long term, the initiative aims to mobilise up to €80 billion in additional investment for European growth companies. The fund is designed to complement other European funding instruments, in particular the planned Scaleup Europe Fund of the European Commission, which will invest directly in technology companies and is to be in the €5bn range. Their shall be no competition between those European financing instruments, but the Scaleup Fund would rather be a target for the EIF fund for backing, a spokesman of EIF commented.