The European Commission launches the new blended finance instrument for scaling-up breakthrough innovations.
As part of the European Innovation Council (EIC) pilot under Horizon 2020, the European Commission (EC) has now launched the most novel part of the programme: blended finance for scaling up “breakthrough, market creating ideas”. This constitutes the latest development in the ambitious pilot phase of the EIC, along with the appointment of the EIC pilot advisory board.
The blended finance instrument is a modified version of the SME instrument. The SME instrument phase 1, comprising small €50’000 grants for feasibility studies, will be discontinued with a final cut-off in September, while the SME instrument phase 2 will be henceforth dubbed ‘the Accelerator’. Under the Accelerator, applicants will continue to be able to seek funding in the form of the current grant of up to €2.5m for late stage development expenses. Additionally however, they can now “opt-in” to apply for additional funding in the form of equity or convertible debt. Individual beneficiaries can receive up to €15m in this complementary non-grant funding. Note that companies continue to be able to apply for grant-only funding as under the existing SME instrument phase 2.
The Accelerator pilot will support high-potential enterprises with financing, as well as, coaching and mentoring, with the goal of developing and bringing to market new products, services and business models that could drive economic growth, fill the market gap by supporting innovation considered too “high-risk” for private investors. It complements the EIC pathfinder pilot, a successor programme to the existing FET Open and Proactive instruments, supporting early stage innovation. In this way, the EIC pilot aims to cover the entire innovation chain. The Accelerator pilot has at least €100m available to beneficiaries for the non-grant part of the funding, but that amount can be increased if demand is high.
The next step in the development of the EIC enhanced pilot is the publication of a call to recruit a first set of 3-5 programme managers with leading expertise in new technologies to provide full-time hands-on support for projects. The EC expects to hire them by the end of 2019. The exact tasks of the programme managers remains to be defined in the course of a series of workshops, involving experts from Europe and outside Europe. They are due to be set up at the end of 2019. The programme manager role, modelled or “inspired” by that of DARPA, is expected to include the constitution of “portfolios” of complementary projects, advising on direction of projects and termination of funding.