The European Innovation Council Fund (EIC Fund) is building a portfolio of 159 early-stage technology companies for a total of €680 million in investment, and an average of €4.3 million per company .
About the EIC Fund
The EIC Fund, providing venture capital for high-risk, high-impact innovation, became a legal entity on 22 June 2020.
The EIC Fund is set up to target the funding gap at the start-up and scale-up stage, where currently the European venture capital market relatively underperforms as compared to the global venture capital market.
The EIC Fund provides equity from €0.5m to €15m to breakthrough innovation companies selected for EIC Accelerator blended finance support (grant and equity). This is the first time the European Commission will make such direct equity investments in companies, with ownership stakes expected to be in general from 10% to 25% in start-up companies. The EIC Fund Board of Directors decide on the equity financing for innovators, following a thorough evaluation by external experts and a due diligence process overseen by a committee of seasoned external practitioners and investors. The European Investment Bank is advisor to the EIC.
The EIC Fund provides patient capital in the form of equity or quasi-equity (which may also be blended with a grant component) to SMEs and start-ups with potentially market-creating innovations, whether based on breakthrough disruptive technologies originating from research (deep-tech) or on social innovation, thereby contributing to bridge the gap between innovation and market uptake.
The EIC Fund is an “impact driven” tool conceived to support equality and gender balance and for contributing to sustainability with a particular focus on health, resilience and the twin green and digital transitions.
Its main purpose is not to maximise the return on investments, but to accompany the companies in their growth as patient capital investor (EIC Fund Investment Guidelines).
The Commission has announced the first round of direct equity investment through the new EIC (EIC) Fund on 6 January 2021. 42 highly innovative start-ups and small and medium-sized businesses (SMEs) will together receive equity financing of around €178 million to develop and scale up breakthrough innovations in health, circular economy, advanced manufacturing and other areas.
Under the EIC Accelerator a total of 293 companies have already been selected for funding worth over €563 million in grants since December 2019. Among those, 159 companies have been selected to additionally receive the new equity investments from the EIC Fund (due diligence on selected companies is ongoing).
How can you get involved?
Start-ups, SMEs, entrepreneurs with a business plan to develop and scale up a high-risk innovation, should first apply for the EIC Accelerator. Companies can apply for grant funding alone, or a combination of grant and equity (“blended finance”). The EIC Fund is tasked to implement the equity component of the blended finance support provided by the EIC.
The EIC Fund supports the companies in seeking other investors, helping them with the matchmaking and providing the tools they need, so they are not left alone to find the additional, but not alternative, resources and expertise.
The EIC Fund is preparing further investments into the companies in its pipeline. To reach this goal, the EIC Fund provides support to the companies through a matchmaking platform to find potential co-investors, which is being set-up. Co-investors by signing up on the platform have access to an overview of the cases for which actively co-investment is sought. Information available on the companies and deals includes the company profiles, teams and investor materials (including pitch-decks). After choosing the most suitable company, each investor has the possibility to express their interest in co-investing in it.
The Commission will soon open new set of EIC calls for proposals under Horizon Europe, the research and innovation framework programme for the period 2021-2027. This includes
the EIC Accelerator (with a grant and EIC Fund equity part) and will be published on the Funding & tender opportunities portal.
Frequently asked questions on the EIC Fund
Which companies are eligible? How are investment decisions taken? Can the EIC Fund compete with private funds in terms of flexibility and bureaucracy?
Find out more information on the EIC Fund.
If you are interested in co-investing with the EIC Fund, please send an e-mail to RTD-EIC-FUND-INVESTORS@ec.europa.eu for further information.