Brussels is moving from vision to execution on its flagship effort to keep Europe’s brightest tech firms from heading overseas. Last week, the European Commission gathered leading private investors and the European Investment Bank to jointly signal their intent to establish the Scaleup Europe Fund—a multi-billion-euro tool to help the continent’s most promising tech companies.
“If we create a European Single Market that favours innovation and growth, we can convince European founders to stay—or return—at the old continent,” said Benn Butters, CEO of Eurochambres, the association of European chambers of commerce and industry during a meeting last week aimed at drafting a specific plan to stop Europe’s startup “brain drain”.
The meeting, hosted by Commissioner Ekaterina Zaharieva (Startups, Research and Innovation), brought together a core group of potential founding investors alongside the Commission and the EIB Group.
The list included Novo Holdings, EIFO (Denmark’s Export and Investment Fund), CriteriaCaixa, Santander/Mouro Capital, Fondazione Compagnia San Paolo with Intesa Sanpaolo and Fondazione Cariplo, APG Asset Management (representing Dutch pension fund ABP), Wallenberg Investments, and BGK (Bank Gospodarstwa Krajowego) of Poland.
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Powerful investment engine
The initiative was broadly welcomed by business. Novo Holdings, for example, stated it “reflects a shared commitment to strengthen Europe’s ability to finance and scale innovation and to support the development of globally competitive companies.”
The announcement marks a major step in turning Commission President Ursula von der Leyen’s pledge from her 2025 State of the Union address into reality. The initiative, part of the EU’s Startup and Scaleup Strategy, aims to close the long-lamented late-stage funding gap that has pushed many European innovators abroad.
Europe has the ideas and the talent to build the most innovative companies in the world. – Commission President Ursula von der Leyen in her 2025 State of the Union address
“Europe has the ideas and the talent to build the most innovative companies in the world,” Ms von der Leyen said. “But as they scale up, we need to ensure they have the means to grow, attract investment and thrive right here at home. The Scaleup Europe Fund is an essential part of our work to make sure the best of Europe can choose Europe.”
Now, investors will work with the Commission to make the fund operational, which targets an initial size of €5bn—of which €3bn has already been committed, with another €1bn set aside from the European Innovation Council (EIC) Fund. The ambition is to ultimately expand to €25bn, creating a powerful investment engine for Europe’s strategic technologies.
AI, semiconductors, biotech, and more
The Scaleup Europe Fund will focus on large-scale, late-stage investment rounds—typically the phase where companies have proven products and revenues but need substantial capital to expand globally—above €100m. With the fund, the Commission mainly hopes to target firms developing artificial intelligence, quantum and semiconductor technologies, robotics, energy and space technologies, biotech, medtech, advanced materials, and agritech.
One core condition will be that supported firms retain their headquarters and key operations within Europe, directly addressing concerns about talent and intellectual property moving abroad.
Europe has recently seen several high-profile acquisitions by non-EU firms—such as AMD’s €665m purchase of Finland’s Silo AI and Apple’s acquisition of France’s Datakalab, which once again raised alarm bells over the need to safeguard the continent’s technological sovereignty.
By pooling public and private capital, the new fund aims to reverse that trend and finally offer Europe’s innovators a viable alternative to the deeper capital markets of the United States and Asia.
The fund will operate on market terms, co-financed and independently managed by a private fund manager to be selected through a public call in the coming months. The appointment of the management company is expected by January 2026, with first investments targeted for spring 2026.
The Commission will participate as a founding investor on equal terms with private partners, ensuring the initiative remains investor-driven rather than politically allocated. Experts have noted that this is crucial to avoid the Commission favoring companies aligned with strategic EU priorities in the awarding of funds, and start ups with a stronger market potential still missing out.
Complementing existing EU tools
While the EU already supports innovation through the EIC Fund, the European Tech Champions Initiative (ETCI), and InvestEU, these instruments primarily target earlier stages or smaller ticket sizes. The new fund fills the critical late-stage gap for rounds above €100m, where European founders have struggled most to find capital.
Europe lacks startups, but that it lacks the money to help them grow. – Andreas Schwarzenbrunner, Speedinvest
Analysts say this move could be pivotal. Andreas Schwarzenbrunner, of venture capital firm Speedinvest, told Bloomberg that the issue is not that Europe lacks startups, but that it lacks the money to help them grow. According to Mr Schwarzenbrunner, the Scaleup Europe Fund could become a harbour for Europe’s global tech companies—though he also noted on LinkedIn that the current commitments of €3–5bn remain modest compared to global dynamics.
