The venture capital funds will support early-stage SMEs and start-ups working on AI and Blockchain technologies under a new equity investment pilot.
On 28 October, the European Innovation Fund (EIF) announced that the first six venture capital funds had signed up under the InnovFin AI and Blockchain Technologies (AI/BT) initiative. Through the InnovFin Equity programme, itself part of the InnovFin – EU Finance for Innovators under Horizon 2020, and the European Fund for Strategic Investments (EFSI), the EIF is running this pilot initiative dedicated to financial intermediaries that specialise in Artificial Intelligence and Blockchain technologies.
InnovFin Equity provides equity finance through selected financial intermediaries to early-stage and growing enterprises. Through InnovFin, the EIF invests up to 25% of the capital the participating financial intermediaries commit into those funds. Since early 2020, the European Commission and the EIF have been making additional investment available to support venture capital funds with a technology focus, to advance Europe’s technological sovereignty. Thus far, six venture capital funds from Austria, Finland, Germany, Luxembourg and the Netherlands have signed an equity agreement with the EIF, and with the EIF’s support, they will provide a total of €700mio. to be invested in the tech sector. Under the AI/BT pilot, targeted applications notably include Internet of Things (IoT), automation, machine learning, data, fintech, or cybersecurity. Start-ups and SMEs in early- and growth-stages can now apply for investment under the funds.
The InnovFin instruments will, in the next framework period running from 2021 to 2027, be folded together with other financial instruments of the EU under the InvestEU programme. This programme will bring together the various EU financial instruments currently available, including: the European Fund for Strategic Investments (EFSI); the Connecting Europe Facility instruments; specific facilities under the Competitiveness Of Small and Medium-Sized Enterprises (COSME) programme; as well as specific guarantees and facilities under the Employment and Social Innovation programme (EaSI). The new unified programme will be organised in four thematic “windows” for funding: sustainable infrastructure; research, innovation and digitisation; SMEs; and social investment and skills. Negotiations on the budget for the programme as a whole, and the part allocated to research, innovation, and digitisation, are due to begin between Council and the European Parliament in December.
With the current pilot run through the InnovFin programme as part of Horizon 2020, Swiss financial intermediaries focusing on AI and Blockchain applications are invited to apply to the call open until 31 of December. Swiss SMEs and start-ups wanting to apply for equity however, should check the geographical focus of the specific venture capital fund they would like to apply to (see this list of participating funds).