The European Commission and the European Investment Fund (EIF) have launched a Pan-European Venture Capital Funds-of-Funds programme (VentureEU) to boost investment in innovative start-up and scale-up companies across Europe.
Venture capital (VC) is vital to a well-functioning Capital Markets Union, but remains underdeveloped in Europe. In 2016, venture capitalists invested about €6.5 billion in the EU compared to €39.4 billion in the US.
Moreover, VC funds in Europe are too small – €56 million on average compared to €156 million in the US. As a result, these companies move to ecosystems where they have better chances to grow fast.
the Commission and the EIF announced six participating funds to receive EU support in their mission to invest in the European venture capital market. Backed by EU funding to the tune of €410 million, the funds are aiming to raise up to €2.1 billion of public and private investment. In turn this is expected to trigger an estimated €6.5 billion of new investment in innovative start-up and scale-up companies across Europe, doubling the amount of venture capital currently available in Europe.
The six funds will take stakes in a number of smaller investee funds and cover projects in at least four European countries each. These investee funds will help finance small and medium-sized enterprises (SMEs) and mid-caps from a range of sectors such as information and communication technologies (ICT), digital, life sciences, medical technologies, and resource and energy efficiency.
The EU investment in VentureEU will be managed by the EIF under the supervision of the Commission and rolled out via six professional and experienced fund managers ensuring a fully market-driven approach. This will attract more investments and significantly increase the availability of VC funding for start-ups and scale-ups in the EU.