Ask European startup founders where they went looking for growth capital, and you’ll hear the same answer over and over: California. Companies that could have stayed in Europe, kept hiring here and kept paying tax here, move instead to chase investors in the US. From Tuesday, Brussels has its own €5bn tool meant to stop that drift.
EQT, a Swedish investment group managing €269bn in assets, now decides where that money goes, after winning an open contest to run the fund. The fund operates on commercial terms, not as a grant scheme. The Commission made it official this week, signing the founding documents and folding the fund into the European Innovation Council (EIC) Fund as a new arm.
“When Europe invests in its innovators, Europe invests in its future,” Commission President Ursula von der Leyen said at the launch. “This is the goal of our Scaleup Europe Fund.”
Closing Europe’s funding gap
The fund’s focus sits in artificial intelligence, quantum computing, clean technology and biotechnology. Its backers describe this mix, more broadly, as digital systems, industrial systems and life sciences.
Ms von der Leyen first floated the fund in her 2025 State of the Union address, when the Commission still expected a launch in early 2026. EQT was picked as fund manager in May, and the founding investors have spent the months since finalising governance and legal structure.
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Brussels already had a tool for growing companies, but a small one. The EIC’s existing fund caps its support at €30m per company, not enough for a serious growth round today. The new fund targets exactly that gap, backing companies that have already proven their idea and now need tens or hundreds of millions of euros to expand, rather than early-stage startups.
What happens next
Nine private investors from across Europe have joined the Commission, from Denmark’s state export fund EIFO to Spain’s CriteriaCaixa to the Wallenberg family’s investment vehicle in Sweden. Banks, pension funds and insurers such as Allianz are all putting money behind the €5bn target, though the final size will depend on how many investors sign on.
The Scaleup Europe Fund also demonstrates what we can achieve in a short time when the Commission works hand in hand with leading private investors.
— Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation
Commissioner for Startups, Research and Innovation Ekaterina Zaharieva called the launch a shift in the investment landscape for European tech firms. “The Scaleup Europe Fund also demonstrates what we can achieve in a short time when the Commission works hand in hand with leading private investors,” she said.
A European scaleup that has been around for 10 years typically has only half as much capital as a comparable company in San Francisco, according to the European Investment Bank. Nearly a third of the bloc’s unicorns, or startups worth more than €1bn, have moved abroad over the past 15 years chasing money they could not find at home. The first investments from the Scaleup Europe Fund are expected within weeks.
