European Commission

The European Commission, as a core institution of the European Union, is not a traditional venture capital firm but acts as a significant strategic investor and facilitator of funding for innovation, research, and economic development across its member states. Its investment activities are primarily channeled through large-scale, multi-year funding programs designed to address market failures, foster technological sovereignty, and accelerate the green and digital transitions within the EU. These initiatives aim to bridge funding gaps for high-risk, high-impact projects that might struggle to secure purely private capital.

One of the most prominent vehicles for direct investment into startups and SMEs is the European Innovation Council (EIC), which is part of Horizon Europe, the EU's flagship research and innovation program with a substantial budget of €95.5 billion for 2021-2027. The EIC Accelerator, a key component, provides blended finance – a combination of grants and equity investments – to individual deep tech startups and SMEs. This program specifically targets companies developing breakthrough innovations with the potential to create new markets or disrupt existing ones, offering substantial capital to scale up.

Through the EIC Accelerator, companies can receive a grant component of up to €2.5 million, alongside an equity investment managed by the EIC Fund. The equity component can range from approximately €0.5 million up to €15 million, making it a significant source of capital for early-stage and growth-stage companies. This blended finance approach is unique, providing both non-dilutive funding for development and direct equity for commercialization and scale-up, thereby de-risking private co-investment.

Beyond direct funding, the European Commission also mobilizes significant private and public investment through programs like InvestEU. This initiative aims to trigger over €372 billion in additional investment across Europe by providing an EU budget guarantee to financial partners, encouraging them to lend to or invest in strategic projects. While the Commission does not issue individual checks under InvestEU, it creates the framework and provides the guarantee that enables financial institutions to support a wide array of companies and infrastructure projects, complementing its direct funding efforts.