EIC Fund Update - New External Fund Manager Appointed

What Will This Mean for the EIC Fund?

AlterDomus will be responsible for making key investment decisions regarding the equity investment aspect of the blended funding in accordance with the EIC Fund's Investment Guidelines. Following what has been a delayed process, the EIC state that the "first investment decisions are expected to be taken during October...".

Start-ups and SMEs that have been selected for equity funding have faced waiting times of greater than one year. The lack of funds has put many companies at risk of closure.

How will the EIC Fund work?

The reorganisation of the EIC Fund as an alternative investment fund (AIF) will have investment decisions managed and executed by the alternative investment fund manager (AIFM), AlterDomus.

More specifically, the funding decisions (related to both grants and equity) on all companies selected through the EIC Accelerator's vigorous evaluation process will be delegated to the Fund Manager. These decisions will still be in line with the EIC Fund's Investment Guidelines and follow the EIB's due diligence process.

The application and evaluation process for the EIC Accelerator program remains under the guidance of the EIC and SME Executive Agency (EISMEA).

Source: https://eic.ec.europa.eu/system/files/2022-10/FINAL4%20-%20EIC-HE%20chart.pdf

The Current Status of the EIC Fund

Since the implementation of the EIC Fund as part of the Horizon Europe programme, only one company has received equity investment. During this period, there have been 4 cut-offs for applicants, and 182 companies have been selected for blended finance. Given that there has only been one signed deal, the EIC has a clear backlog of deals that need to be finalised.

Most of the selected companies that we have been in contact with have all commented negatively on two things:

the cumbersome application forms, and
the duration of the process.

Background Information on the EIC Fund

The EIC Fund is the investment vehicle of the EIC Accelerator programme - the EC's flagship innovation funding programme. With a budget of €3 billion from 2021-2027, the EIC Fund is positioned to be one of the largest deep-tech venture capitalists in Europe during this period.

The EIC Fund is a venture capital fund owned by the European Commission established to make direct equity investments in companies with breakthrough technologies. The Fund usually targets minority ownership stakes (from 10 to 25%). 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. More information on the EIC fund can be found on the EIC's webpage.

Resources

At Winnovart, it is part of our mission to bridge the gap between stakeholders of the grants-funding market space across Europe. We believe in the potential of grants to create ecosystems that drive innovation, and growth and reduce disparities between the regions of Europe. Our aim is to support innovative SMEs, private investors and funding agencies to become part of this ecosystem and make the most of it.

Our presence in Western, Eastern and Northern Europe enables us to create international business cases for our clients, in the context of attractive funding programmes as well as beyond it, by opening up international development opportunities.

For more updates on funding opportunities, please follow us on social media: Facebook, Linkedin or Twitter.

European Commission (EC) Appoints a New External Fund Manager

What Will This Mean for the EIC Fund?

How will the EIC Fund work?

The Current Status of the EIC Fund

Background Information on the EIC Fund

Resources