Europe is preparing one of its biggest tech investment programmes, with a plan to mobilise up to €80 billion for high growth companies that want to compete on the global stage.
The European Investment Bank Group, EU governments and private institutional investors have launched phase 2 of the European Tech Champions Initiative, known as ETCI 2.0. The programme builds on the first phase, which supported 15 mega funds investing in European startups and helped nurture 12 EU based unicorns valued at more than €1 billion.
This time, the goal is much bigger because ETCI 2.0 has a fundraising target of up to €15 billion and hopes to mobilise as much as €80 billion for more than 1,500 European scaleups. The European Investment Bank Group also announced it will invest up to €1.25 billion into the fund.
How Will The Money Reach Tech Companies?
The programme has been designed to back companies that have already grown beyond the startup stage and now need much larger investment rounds.
ETCI 2.0 will support mega funds and, for the first time, mid sized growth funds worth more than €300 million. According to the European Investment Bank, the initiative is expected to anchor more than 100 investment funds, with up to 45 mega funds making average investments of €200 million into individual companies.
The initiative will also launch a pan European investment platform that gives institutional investors access to tech funds. The platform will offer information on investment opportunities, market intelligence and ecosystem updates, helping investors identify companies and fund managers working in Europe’s tech sector.
The European Investment Bank said the programme will back companies working in areas such as AI, deep tech, life sciences, cybersecurity, space, fintech and clean tech. The investment platform has also been designed to give institutional investors flexible investment options, co investment opportunities and access to leading growth stage fund managers.
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Why Is Europe Putting More Money Into Scaleups?
One of the long standing problems for European tech companies has been finding enough money once they outgrow the startup stage.
Nadia Calviño, President of the European Investment Bank Group, said, “The partnership launched today is all about scale and speed, powering European pioneers with the capital they need to grow. This is a decisive step to address the funding gap for scale ups, making sure that ideas, technologies and innovative firms born in Europe can stay and thrive in Europe.”
The first phase of the initiative showed there was demand for this type of investment. Building on that experience, ETCI 2.0 will be around four times larger than its predecessor, triple the number of mega funds it supports and open the programme to mid sized growth funds. The European Investment Bank also said the programme will strengthen connections between national and European investment programmes and give long term investors an organised way to invest in Europe’s growth stage tech companies.
Who Is Backing The Programme?
All 27 European Union governments are supporting the initiative, together with the European Investment Bank Group and a growing list of private institutional investors.
The first group of investors includes AltamarCAM, Azimut Holding, Banco Santander, BBVA, Compagnia di San Paolo, Danske Bank and Green Arrow Capital, with more expected to join later.
Simon Harris, Ireland’s Finance Minister, welcomed the programme during Ireland’s Presidency of the Council of the European Union. He said, “Ireland supports the launch of the European Tech Champions Initiative 2.0, which marks an important step in closing Europe’s scale up financing gap. The inclusion of mid sized funds to ensure scale up needs at all stages can be met and the involvement of institutional investors to mobilise private capital at scale are crucial developments, further aligning the initiative with Europe’s competitiveness agenda.”
The European Investment Bank also said ETCI 2.0 will work with existing national programmes such as France’s Tibi initiative, Germany’s WIN initiative and the Scaleup Europe Fund. The intention is to give tech companies more opportunities to secure large investment rounds without leaving Europe, giving investors easier access to one of the continent’s fastest growing tech markets.
