EIC Fund has become official entity
On 23 June 2020, the European Commission announced that the EIC Fund, which will provide equity from €0.5m to €15m to breakthrough innovation companies selected for EIC Accelerator blended finance support (grant and equity), has become an official entity. This is the first time the European Commission will make such direct equity investments in companies, with ownership stakes expected to be generally 10% to 25% in start-up companies. The European Investment Bank, as advisor of the EIC Fund on behalf of the European Commission, will manage the ownership stakes of the European Commission.
The EIC Fund fills the funding gap at the start-up stage where the EU venture capital market underperforms compared to the global venture capital market. Since the start of the EIC Accelerator Pilot in the autumn of 2019, a total of 102 start-ups and SMEs active in all technology-intensive sectors (health, digital, energy, etc.) have been pre-selected for equity financing for a total of nearly €400m. Further companies will be preselected by the EIC Accelerator Pilot in July (in Green Deal areas) and November. These companies are being subject to due diligence by the European Investment Bank (EIB), which acts as the investment Advisor to the EIC Fund.
From 2021, the EIC Fund will be financed by the EIC to be established under Horizon Europe. Depending on the demand and quality of proposals, it is expected that at least one third of the EIC budget, currently proposed at €10bn, will be in the form of equity managed by the EIC Fund. Furthermore, the EIC Fund will increase financing for high-impact innovation by crowding-in private investment, co-investing with venture capital funds, national promotional banks, corporate venture funds and other private investors.TOP