EU makes equity investments in 42 innovative start-ups

7 Jan 2021395 Views

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In a ‘new form of financing’, a total of €178m is being invested in 42 European companies, including an Irish start-up.

The EU is becoming a direct shareholder in more than 40 promising start-ups and SMEs through the new European Innovation Council (EIC) Fund.

The European Commission announced yesterday (6 January) that 42 companies will together receive equity financing of around €178m to develop and scale breakthrough innovations in areas such as health, the circular economy and advanced manufacturing.

The equity investments range from €500,000 to €15m per company, and will complement grant financing that has already been provided through the EIC Accelerator Pilot. This is the first time that the European Commission has made direct equity investments in start-ups, with ownership stakes expected to range from 10pc to 25pc.

“Europe has many innovative, talented start-ups, but too often these companies remain small or relocate elsewhere,” said Mariya Gabriel, European commissioner for innovation, research, culture, education and youth.

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“This new form of financing – combining grants and equity – is unique to the European Innovation Council. It will bridge the funding gap for highly innovative companies, unlock additional private investments and enable them [to] scale up in Europe.”

First EIC Fund investments

Under the EIC Accelerator, a total of 293 European companies have already been selected for grants worth more than €563m. Among those, 159 have been selected to additionally receive the new equity investments from the EIC Fund. The 42 companies announced this week are just the first group to successfully pass the evaluation process.

The first European company to sign an investment agreement with the EIC Fund was French company CorWave, which secured €15m for its tech to help patients with life-threatening heart failure.

Dublin-based Geowox was also among the beneficiaries in this first round of investments. The SaaS start-up, founded in 2017 by Marco Giardina, Paul van Bommel and Stefano Francavilla, has developed an automated property valuation technology using open data and machine learning models.

Other companies in this first round include Dutch IoT start-up Hiber, French solar aircraft company XSun, and Iceland’s EpiEndo Pharmaceuticals.

Sarah Harford is sub-editor of Siliconrepublic.com

editorial@siliconrepublic.com