EU direct equity deals top €500m

June 24, 2021 // By Nick Flaherty
EU equity deals top €500m
Over 110 startups across Europe have received a total of €500m in direct equity investment from the European Commission

The European Commission has launched its second round of direct equity investment through the European Innovation Council (EIC) Fund, with total investments of over €500m for the scheme so far.

Since its launch in 2020, the EIC Fund has now approved 111 investments in a range of startups, although it has only publicly listed 16.

The 69 deals in the second round include quantum computer startup Pasqal in France, Magnitude Space in Belgium developing satellite technology fro the Internet of Things and Keyou in Germany which is developing a technology that allows hydrogen to be used in diesel engines. Other EIC deals include TiHive in Grenoble, France, developing a terahetz sensor technology.

“The EIC Fund has developed incredibly quickly and has established itself as a new force in EU technology investments. This unique form of financing – combining grants and equity – is proving itself highly attractive to Europe's most promising startups, and providing them with the means to develop and scale their businesses in Europe,” said Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth.

The equity investments range from €500,000 to €15m per company, complement the grant financing of up to €2.5 million that have already been provided through the EIC Accelerator. The Horizon Europe innovation programme is expected to invest more than €3.5 billion over the next seven years as research and development grants.

The EIC Fund's ownership stakes range from 10 percent to 25 percent and is typically used to leverage in other investors as part of a larger financing round. All investments are preceded by a thorough evaluation by external experts, a due diligence process overseen by the EIC Fund Investment Committee, and a final decision by the EIC Fund Board of Directors.

The fund says it aims to fill a critical financing gap and its main purpose is not to maximise financial investment returns, but to have a high impact by accompanying companies with and disruptive technologies in their growth and sharing risks by building a large network of capital providers and strategic partners. The fund says it pays particular attention to empower and support female founders, as well as contributing to reduce the innovation divide among EU countries.

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