Another step forward in EU support for technology SMEs

As the year comes to an end, the European Commission nevertheless demonstrates the continuity of its investment in SMEs and small mid-caps by disclosing the main support for R&D for 2025.

Within the EC's “flagship program” — Horizon Europe —, there is now a review of the initiative called the European Innovation Council (EIC), whose primary objective is to support the entire life cycle of an innovation project, from its conception until a commercialization phase. The EIC focuses on the identification, development and expansion of technologies proposed by highly innovative and revolutionary companies, which are considered crucial to the fulfillment of European policies focused on the ecological and digital transition.

In line with the EIC's objectives, its Work Program for 2025 was published on October 29th, which foresees the allocation of a total budget of 1.4 billion euros, reinforcing the EC's investment in risky projects, with greater potential technical and commercial viability, aligned with European priorities. From previous programs, the vast majority of opportunities have migrated – as is the case with EIC Pathfinder, EIC Transition and EIC Accelerator –, but now a new mechanism has emerged in light of which the EC seeks to support investment-hungry European SMEs and small-mid caps in equity, the call: EIC Strategic Technologies for Europe Platform (STEP) Scale Up Call.

So, it is important to understand what underlies the EIC STEP Scale Up: it is a financing instrument with a total budget of 300 million euros, which aims to foster pioneering innovation in strategic technologies and boost Europe's economic, industrial and technological competitiveness. It brings with it a new pilot call from the EC to fill an important market gap in financing deep-tech companies in Europe.

The EIC STEP Scale Up therefore represents a new and unique opportunity for companies – SMEs and small mid-caps – with a unique ambition to expand disruptive innovations in critical areas for Europe, such as digital, deep tech, cleaner technologies and biotechnology.

The main target audience for this new support initiative are therefore European companies, located in any Member State, who wish to raise financing of a significant amount (in the order of 50 to 150 million euros), through which the EIC STEP Scale Up will be able to contribute an amount between 10 and 30 million euros. This instrument will therefore act as a new opportunity in considering financing sources and presents itself as a potential catalyst for broader financing rounds.

From the above, it can easily be concluded that this new initiative – the EIC STEP Scale Up – reflects the EC's clear intention to value and invest in innovative and disruptive companies and technologies, in line with the need to safeguard a more competitive and resilient Europe, especially given the global geopolitical and competitive context of today.

As is natural, the administrative, technical and financial procedures of this new initiative will be more complex and demanding, understanding as critical and fundamental the consistency and coherence of the design of the technical component, the definition of the strategy and technological roadmap and the assessment of the financial impact . It is therefore required that interested parties ensure close monitoring through entities with multidisciplinary and specialized response capacity, with demonstrated experience and success in capturing direct incentives from the EC, and in particular from the EIC.