The European Innovation Council ends the year with an expansive funding round and a look back at its impact over its first years providing blended finance.
In the latest round of funding of the European Innovation Council’s (EIC) Accelerator instrument, the European Commission selected 99 innovative start-ups and SMEs that will receive €627 million of EU funding to help them bring their promising technologies to the market.
The selected companies are geographically spread out, covering 21 nationalities, including seven from Horizon Europe “widening countries” that have lower levels of research and innovation performance. The selection also confirms the high demand for EIC equity investments with 65 of the 99 companies requesting a cumulative equity investment of up to €414 million (out of the total €627 million). The grant financing usually is provided within the coming months, while the equity investment is likely to take longer as the arrangements for implementing EIC equity need to be re-established under Horizon Europe. This delay will also affect companies selected in the previous funding round.
Despite the difficulties that still surround the implementation of the equity part of the instrument, most companies requested so-called “blended finance” including both grant and equity. Indeed only 11 of the 99 projects selected will receive ‘grant only’ support. Other notable results include the stable overall 2:1 ratio of investment funding to grant funding, and the varying geography of the companies supported through the two challenge calls in green and strategic technologies. There was also a notably strong success-rate for female-led companies: although they represented only 14% of proposals, they totalled 19% of the awarded projects.
The EIC Accelerator offers start-ups and SMEs grants of up to €2.5 million combined with equity investments through the EIC Fund ranging from €0.5 to €15 million. Since its launch in March 2021, over 4’000 start-ups and SMEs have applied and over 1’800 have submitted full applications to the two cut-offs of this year, in June and October. The 99 companies announced now join the 65 companies selected following the June cut-off, which were announced already in October (see SwissCore article). The selected companies can also participate in a number of business acceleration services provided through the EIC community. A review of the activities has been recently published.
This latest ramp-up of activity follows on the broadly positive impact assessment that the EIC just published, covering the EIC pilot phase up until the end of 2020. Notably, the EIC investments crowded in €9.6 billion in follow on investments, primarily from Venture Capital, but also from corporates, national promotional banks and others. Beneficiaries have reached a market valuation of around €50 billion, including among its alumni 91 “centaurs” (company valuation over €100m) and 2 “unicorns” (company valuation over €1 billion). 2020 also saw an increasing number of women-led start-ups: of those awarded funding, over 20 percent have a female CEO, a doubling of the previous level. Despite the success of the programme up to 2021, the pace will slow temporarily. Due to a delay in the adoption of the EIC work programme 2022, there will be no EIC Accelerator cut-off date in January as originally foreseen.
Other recent highlights of the European innovation agenda include the announcements of the winners in two major competitions: the Women Innovators Prize and the Social Innovation Prize.