Does the European Innovation Council (EIC) target the right company profiles with its flagship funding programme?

We are analysing if the EIC Accelerator/ EIC Fund - EC's flagship innovation funding programme does a good job at identifying European outliers and overseen game-changing innovators OR it supports companies already funded by private investors. This research looks into the fundraising backgrounds of the beneficiaries of the programme.

The preliminary findings show that most EIC Accelerator/ EIC Fund grants & investment beneficiaries have successfully raised private investment prior to their EIC funding. While this is not shocking, this may be considered contrary to the spirit of a public funding programme and can raise the question about targeting the right company profile...

Introduction

These days there are more grant and innovation funding programmes than ever before, with central and regional governments taking more action to spur scientific innovation. These funding programmes aim to bridge the financial gap for start-ups by providing founders with access to capital, expertise and business mentoring services. Yet, it appears that some programmes are 'bridging this gap' better than others.

Our research focused primarily on the profiles of the funding recipients of these programmes. Although most public funding programmes publish all information for each project, there were some exceptions. Where there was limited information, we have provided a disclaimer. 

EIC Fund

The European Innovation Council (EIC) Fund is the investment vehicle of the EIC Accelerator programme - the European Commission's flagship innovation funding programme. With a budget of €3 billion from 2021-2027, the EIC Fund is positioned to be one of Europe's largest deep-tech venture capitalists (VCs) during this period. The Fund usually targets minority ownership stakes (from 10 to 20%). Furthermore, it participates in direct equity investment ranging between €0.5 million to €15 million in innovative companies that pass the rigorous EIC Accelerator selection process. The Fund invests on a matching (1:1) basis alongside a syndicate of lead investors from the private market.

DISCLAIMER: This analysis is based on data published by the EIC. More specifically, on the names of the companies receiving investments from the EIC Fund. Unfortunately, there are many more companies that have signed deals with the EIC Fund, but their names have not been published yet. We strongly believe that the EIC should publish full and complete lists since the investment budget is based on public money.   

76% of EIC beneficiaries have experience with private fundraising

The EIC Accelerator/Fund tends to favour companies with some form of private fundraising history. From our sample of 550 companies spanning the Horizon 2020 and Horizon Europe programmes, 76% of all companies selected for grants/investments have prior private fundraising history. This percentage increases when looking at the number of selected companies that have signed (and published) deals with the EIC Fund. 

Source: Data published by the EIC

A regional breakdown

Source: Data published by the EIC

Source: Data published by the EIC

81% of Companies with signed deals have experience with private fundraising

81% of companies with published signed deals with the EIC Fund for investment (blended finance or equity only) have had some previous private fundraising history. 

Read more: EIC Fund Statistics & Insights, European Commission (EC) Appoints a New External Fund Manager