The European Commission said on Wednesday that it plans to set up a fund, managed and co-financed by the private sector, to help companies to secure funding and scale up their operations in the face of competition from China and the US.
Currently, EU scaleups —businesses that have found their market but need significant investment to expand globally — struggle to find venture capital exceeding €50 million, according to the European Commissioner for Startups, Ekaterina Zaharieva.
In contrast, the US has at least seven times more funding available for such financing cycles. In Europe, the majority of these funds come from non-EU investors, heightening the risks of relocation and loss of economic sovereignty.
The EU has a European Innovation Council (EIC) fund for startups, but its investment ceiling is set at €30 million per company. A Commission proposal to increase its budget by €2.7 billion was rejected by the European Parliament and Council.
To prevent deep-tech scaleups in fields like AI, quantum computing, biotech, and defence from moving to the USA or being acquired by non-EU groups, the Commission proposes launching an EU Scaleup fund in 2026 with over €10 billion, managed and co-financed by the private sector, and focusing on cutting-edge technology investments.
This strategy, unveiled on Wednesday, also introduces an initiative aimed at setting up European hubs for startups and scaleups to connect Europe’s academic ecosystems.
