EU Commission and EIF create venture capital fund to support innovative companies

EPA-EFE/OLIVIER HOSLET

(L-R) European Commissioner in charge of Jobs, Growth, Investment and Competitiveness, Jyrki Katainen, EU Commissioner in charge of Internal Market, Industry, Elzbieta Bienkowska, EU Commissioner responsible for Research, Science and Innovation, Carlos Moedas, and Pier Luigi Gilbert, the CEO of the European Investment Fund (EIF), attend a media conference on the launch of VentureEU, a Pan-European Venture Capital Funds-of-Funds programme, in Brussels, April 10, 2018.

EU Commission and EIF create venture capital fund to support innovative companies


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The European Commission will provide more than €400 million in venture capital for start-up companies across the bloc, through the launch of the VentureEU program, which hopes to mobilise €2.1 billion of total investment to provide venture capital to startups., €400 million of which is EU-funded.

VentureEU is a European fund that aims to bring together various venture capital funds throughout Europe, with the aim of making financing available to start-up and expansion companies in the bloc.

Commission Vice-President Jyrki Katainen, Commissioner for Industry and Entrepreneurship, Elżbieta Bieńkowska, and the commissioner responsible for the Ministry of Science and Innovation, Carlos Moedas rolled out the programme on April 10, saying it will be managed by the European Investment Fund (EIF), under the supervision of the Commission. The fund will have six professional managers who will act as intermediaries to ensure “a fully market-oriented approach”, according to EIF Chief Executive Pier Luigi Gilbert.

Isomer Capital, the European Commission and EIF, and Axon Partners Group, the European Commission and the EIF have all signed on as participants in the fun. The four remaining members – Aberdeen Standard Investments, LGT, Lombard Odier Asset Management and Schroder Adveq – are expected to sign on over the course the year.

The Commission describes VentureEU as “a key element in the European strategy to establish a business and innovation-friendly ecosystem”. It will have an initial EU funding of € 410 million, with more public and private funding expected. Th investments are expected to generate around €6.5 billion in new investments, doubling the amount of risk capital currently available in Europe.

Katainen acknowledged during the press conference that Europe has not been able to attract the same volume of interest as expected. US Venture capitalists have invested only around €6.5 billion in Europe since 2016, compared to around €40 billion invested across the Atlantic.

“This investment mechanism will enable innovative European companies to find the type of financing within the EU that they have traditionally had to find overseas,” said Moedas, as the Commission predicts that some 1,500 start-ups and expansion companies from all of the EU Member States will be able to access the funding.

Under the Pan European VentureEU Funds-of-Funds Programme, the fund-of-funds promoters are focusing their attention on investing in the growth and expansion stage of venture capital funds established or operating in the EU Member States or Associated Countries as part of the Competitiveness of Enterprises and Small and Medium-sized Enterprises and InnovFin Programmes and whose investment strategy is to cover the Societal Challenges and Industrial leadership areas of Horizon 2020,the EU’s €77 billion research and innovation programme for 2014-2020.

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