Innovative start-ups were selected by the European Commission to receive grants, blended finance, or equity investments through the EIC Accelerator cut-off.
As the European Innovation Council (EIC) announces its latest round of awards to high-potential start-ups, it also communicated that a resolution has been found to ongoing delays regarding its controversial equity investment arm.
On 7 June 2022, the results of the first 2022 EIC Accelerator cut-off were announced. In total, 74 high potential companies (out of the 1’000 start-ups and SMEs applications) will be funded through the scheme of the EIC with €382 million allocated budget combining grants and investments. It is the first cut off to receive companies submitted by Knowledge and Innovation Communities (KICs) of the European Institute of Innovation and Technology (EIT) under the EIC’s Fast Track scheme.
The selected companies are coming from 18 countries, with 12% of them coming from Horizon Europe “widening countries” such as Poland or Estonia, which shows that the level of research and innovation performance is increasing. Furthermore, 12% of the successful proposals are companies led by female CEOs. The objective of the EIC Accelerator is to support small and medium enterprises (SMEs), in particular start-ups and spinout companies, to develop and scaleup game-changing innovations. Apart from financial support, which amounts to up to €17.5 million each, the selected companies will receive coaching, mentoring as well as access to investors and corporate.
In addition to grants, the EIC offers equity financing to Accelerator beneficiaries. Equity financing involves the company relinquishing a share of the company to the EIC Fund in exchange for the funding provided. The exact percentage of the company ownership relinquished is subject to negotiation in each particular case. Delays have marred the equity portion of its awards since the beginning of Horizon Europe, due to internal disputes regarding process within the European Commission. Until June, none of the companies to whom the EIC has promised equity had yet finalised an agreement to receive it. Nevertheless, the interest for the EIC equity investments continues to increase since the launch of the fully-fledged EIC instruments in 2021. Indeed, 38 out of the 74 successful companies from the latest cut-off have requested blended finance, meaning they will receive a grant and an equity investment. The remaining 36 requested grant only or grant first options.
The companies are expected to receive the grants within the next few months, whereas the equity investment is planned to be given during autumn 2022. The situation surrounding the delays might improve once the current restructuring of the EIC Fund under the Horizon Europe legislation is complete. Indeed, the first finalised funding was announced on 14 June 2022: The French start-up SiPearl will receive €15 million equity investment through the EIC Fund on top of the €2.5 million EIC Accelerator grant to support the development of a high-performance, low-power European microprocessor for exascale supercomputing.
Moreover, the EIC has launched a €20 million action in support of the Ukrainian innovation community on 9 June 2022. The initiative intends to support at least 200 Ukrainian deep tech start-ups with up to €60’000, as well as provide business advisory services and matchmaking. Through the initiative, the EIC aims to strengthen links between Ukrainian innovators and the European innovation ecosystem to ensure the business continuity and growth of Ukrainian tech companies. It will also serve to support innovative solutions for rebuilding the Ukrainian economy and infrastructure after the war. In order to have a greater impact, the EIC will allocate the €20 million through a competitive call for proposals for a pan-European network of start-up associations, which opened on 23 June 2022, requiring collaboration with at least one Ukrainian innovation stakeholder as well as synergies with relevant EU initiatives. This action was created through an amendment of the 2022 EIC Work Programme, which was first adopted in February 2022 and included funding opportunities of more than €1.7 billion. Thus, the recent amendment includes funding for the specific call launched in support of the Ukrainian deep-tech community.