Two students who met on an Erasmus exchange built satellites that watch almost anywhere on Earth, day or night. Their company just became the first-ever bet placed by a brand-new EU fund built to stop Europe’s brightest start-ups drifting off to Silicon Valley. It is proof that Brussels’ money can follow its words.
Rafał Modrzewski and Pekka Laurila did not set out to build satellites for sovereign intelligence. They met as engineering students on an Erasmus exchange, swapped ideas about radar technology, and eventually founded Iceye in a Finnish university town in 2014. Twelve years on, their company owns the world’s largest commercial radar satellite constellation, one that can photograph a stretch of coastline, a war zone, or a flooded valley in complete darkness or through thick cloud.
On 5 August, that company became the first recipient of a brand-new EU-backed investment vehicle called the Scaleup Europe Fund (SEF). Together with the US investor General Atlantic, SEF co-led a funding round that raised €1bn for Iceye, pushing the company’s valuation past €10bn. SEF itself put in €300m.
Europe’s answer to brain drain
The fund exists because Brussels keeps losing its best companies. In 2024, the American chipmaker AMD bought the Finnish artificial intelligence firm Silo AI for $665m. Apple, meanwhile, bought Spektral, a Danish machine-learning start-up. Each deal followed the same pattern: European engineers, American capital, and profits that flow back across the Atlantic.
SEF, with a target size of €5bn, wants to break that pattern. The European Commission put in €1bn to get it started; private and institutional investors are expected to supply the rest. The goal is straightforward: give Europe’s most promising start-ups enough capital to grow at home. That covers fields such as space technology, artificial intelligence, semiconductors, and biotech. It means fewer companies forced to look for financing in the United States.
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Iceye fits that mission almost too neatly. The company runs its second-largest operations centre in Poland. It works closely with the Polish defence and space sector. It recently delivered Warsaw a fully operational sovereign satellite system in under 12 months after signing the contract, a speed EQT calls unmatched in the industry. Poland now has continuous access to radar imagery. It no longer needs to ask another government to share it.
That kind of independence matters more each year. Russia’s invasion of Ukraine pushed European governments to build their own space-based intelligence. They no longer want to rely solely on allies. Fighting in the Middle East has reinforced the same lesson. When a crisis closes borders and grounds aircraft, satellites in orbit keep working regardless.
From Erasmus to orbit
For Modrzewski and Laurila, the investment closes a loop that started with EU money in the first place. Iceye received its earliest funding through the EU’s Horizon 2020 research programme, long before either founder had built a single satellite.
My co-founder Pekka Laurila and I met as students on an Erasmus exchange. We are grateful for the European Commission’s role in initiating the Scaleup Europe Fund.
— Rafał Modrzewski, Co-Founder and CEO, Iceye
“My co-founder Pekka Laurila and I met as students on an Erasmus exchange, received our first funding through Horizon 2020, and we are grateful for the European Commission’s role in initiating the Scaleup Europe Fund,” Mr Modrzewski said. Victor Englesson, Partner at EQT and Co-Head of the Scaleup Europe Fund, called the deal proof of concept for the whole initiative: “Our first investment reflects exactly what the Scaleup Europe Fund was created to support: ambitious European founders building globally competitive companies in strategically important technologies.”
European Commission President Ursula von der Leyen framed the deal as vindication of her own strategy. “When Europe invests in its innovators, Europe invests in its future,” she said. “This is the goal of our Scaleup Europe Fund: it will ensure our scale-ups can find what they need right here in Europe to grow into world-leading companies.”
For two engineers who once shared lecture notes on an Erasmus exchange, that backing has come full circle, from a research grant to a €10bn company that now helps keep watch over the continent that funded them. What began with a scholarship now ends in a satellite constellation.
