Brussels (Brussels Morning) Announcing the first round of investments through the EU Innovation Council (EIC) Fund, the EU Commission is to provide equity financing of about 178 million euro to 42 innovative small and medium-sized enterprises (SMEs) and start-ups. The aim is to help promote innovations in circular economy, health, advanced manufacturing and other areas.
Commissioner Gabriel’s comments
According to Mariya Gabriel, EU Commissioner for Innovation, Research, Culture, Education and Youth, “Europe has many innovative, talented start-ups, but too often these companies remain small or relocate elsewhere.” The new form of financing – combining grants and equity – “is unique to the European Innovation Council”, she says. The move should help bridge the funding gap for innovative companies, enable their growth in the EU and stimulate private investments.
The planned equity investments range from 500,000 euro to 15 million per beneficiary and complement the financing already provided through the EIC Accelerator Pilot. The move represents the Commission’s first direct equity investment in start-ups. Resultant ownership stakes are expected to range between 10 to 25%.
As part of the EIC Accelerator Pilot, 293 companies have been selected for grants worth more than 536 million euro since the end of 2019. Of these, 159 companies are to receive new equity investments as part of the new investment plan.
CorWave the first to finalise an agreement
The 42 companies selected for the EIC Fund equity investments were the first to pass evaluation, with the French CorWave medical device developer stressing it was the first to ink an investment agreement with the EIC Fund.CorWave is to receive 35 million euro in the fourth stage of start-up financing, which should enable the company to scale up its innovations. The Commission notes it is finalising investment agreements with other companies selected from the aerospace, pharmaceuticals and other sectors.