Are the European Innovation Council’s (EIC) funding programmes successful in helping companies obtain more private investors? 

We are analysing the European Innovation Council’s “EIC Accelerator/ EIC Fund” programme to see if it is successful in bringing in more private investors for the companies involved in its funding scheme. This research investigates the publicly available funding history of 601 companies who received either grant, equity, or blended based investments from the EIC Accelerator programme between 2019-2024. Information sources include specialised platforms such as Pitchbook, Crunchbase, etc. We are reviewing the fundraising history of these companies (private investment, government funding/grants) pre- and post- being selected for funding by the EIC. 

Our preliminary research indicates that the EIC Accelerator programme has been reasonably successful in crowding in additional private investors for these companies, as well as generating new private investors beyond the Fund. 

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 aims to uncover the EIC fund’s current status in generating more private investors for the companies the council selects to invest in. The EIC Accelerator programmes’ structure provides companies with 3 different forms of investment: grant only, equity only, or a combination of the two through a blended finance structure. Typically, their equity and blended finance investment structures require the companies to identify additional private investors to co-invest in the equity portion, alongside the EIC fund. 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.   

Company Background Pre-EIC 

The average number of private investors each company had before the EIC investment was 3.59.

This represents the average number of private investors each company had before the EIC investment. This indicates the notion that the EIC prefers to invest in companies with some previous fundraising history, but still invests in many companies with no previous fundraising history. 

Source: Data published by Pitchbook, Crunchbase, etc.

Geographical Fundraising Breakdown 

This figure represents the 601 companies’ cumulative funding from both private investors and grants, broken down by their respective European regions. As seen, the France & Benelux region dominates, as their total fundraising accounts for 38.8% of Europe’s total funding from the program sample. It is also interesting to note the small percentage that the UK & Ireland region accounts for, likely due to the effects of Brexit as UK companies can only receive grant investments from this program.

Source: Data published by Pitchbook, Crunchbase, etc.

This figure demonstrates cumulative amounts of private investment and total funding for the companies, broken down by country. As seen, the main share of total funding comes from private investment for most countries.  

Source: Data published by Pitchbook, Crunchbase, etc.

EIC Beneficiaries Average Fundraising 

The figure below shows the average amount of total funding (private investments + grants) that each company the EIC invested in raised. Overall, the average amount of total funding each company raised was $20.42 million.  

Source: Data published by Pitchbook, Crunchbase, etc.

The figure below demonstrates the average amount of private funding each company the EIC invested in raised. As seen, the average amount of private investment was $16.02 million per company. When comparing this to the average total funding amount of $20.42, we can see that these EIC beneficiaries all rely heavily on the private sector to raise capital for their businesses. 

Source: Data published by Pitchbook, Crunchbase, etc.

EIC Equity Investments Success 

As shown below, 25.8% of the EIC beneficiaries found private investors to co-invest in them along with the EIC. While this number may seem low, it essential to remember that some of these investments were grant-based only and this program is still relatively new. A large portion of our sample data comes from companies that received their EIC investment in the last year. Considering it likely takes companies a significant amount of time to find other investors to invest in them, we expect the percentage of this sample to increase in the future.

Source: Data published by Pitchbook, Crunchbase, etc.

This figure below depicts the percentage of companies that raised private investments after the EIC round. Once again, a 9.8% success rate seems like a low percentage, but considering how recent the majority of our sample data is, we are inclined to believe that this serves as a promising baseline for the funds’ future success. 

Source: Data published by Pitchbook, Crunchbase, etc.

Read more: EIC Work Programme Overview, EIC Open & Challenges 2024, The EIC Impact Report 2023