EIC alumni start-ups attract €2.6 of outside investment for every invested euro, and its portfolio contains 12 ‘unicorns’. But is this enough?
On the 7th of December 2022, the European Innovation Council (EIC) published its Impact Report at the EIC Summit 2022. The report covers the period from 2014-2021, including the EIC’s predecessor programmes and provides an overview of its latest achievements and major focus areas.
In her foreword, commissioner Gabriel highlights the crucial role of the EIC in implementing the New European Innovation Agenda (NEIA). According to her, “in 2022, the EIC made a major development by establishing the EIC Fund as an investment vehicle for high-risk, high-potential startups in their early stages of development”. Even though the EIC Fund had already made a number of equity investments under direct Commission management, this is an important step in the EIC’s journey to becoming a fully-fledged deep tech programme supporting innovative ideas from concept to market, aiming to become the largest early-stage deep tech investor in Europe.
So far, the EIC has funded 1600 innovative companies and over 500 technology projects leading to a portfolio of companies achieving a combined valuation of over €40 billion, including 12 ‘unicorns’ and 112 ‘centaur’ companies. The EIC managed to incentivise over €10 billion in follow-on investments in its portfolio companies, including from venture capital, corporates, and national promotional banks. Ninety-two investment agreements were signed, and nearly €500 million co-investment alongside the EIC Fund was leveraged, leading to €2.6 of additional equity investment for every invested euro via the EIC Fund. The EIC provided €100 million to commercialise ground-breaking ideas through the first set of Transition calls. Even though Commissioner Gabriel “cannot emphasise enough the need to accelerate efforts to increase the representation of women in all levels of the innovation ecosystem in Europe”, only 20% of the funding went to women-led companies.
The EIC aims to build the next generation of deep technologies. The report highlights the efforts at the forefront of digital, industrial and space innovation illustrated by spotlights on quantum technologies and space. The endeavours to support a sustainable future are presented through spotlights on AgriFood, Renewable Hydrogen and Energy Storage. In pioneering innovation and health, the report highlights cell and gene therapy and neurotech achievements.
In his closing words of the EIC summit 2022, Jean David Malo, Director of the EIC and SMEs Executive Agency (EISMEA), emphasises that “the EIC is nothing without its partners” because “only if we work all together with a common objective, we can change something.”. The impact report also focuses on the importance of partnering to create a European deep tech ecosystem. It especially highlights the value of the partnerships with the European Institute of Innovation and Technology (EIT) to fast-track startups and the European Research Council (ERC) to turn frontier research into breakthrough innovation. Another critical but more general finding is the value of the highly competitive selection procedure leading to a Seal of Excellence, which provides access to other funders. However, the report does not provide statistical evidence for this assumption and only mentions one example where the Spanish Ministry of Science and Innovation allocated €100 million from the Spanish Recovery and Resilience Plan to EIC Seal of Excellence recipients in 2021.
Despite the broadly positive impact assessment, the EIC, and especially its accelerator, also faced troubles earlier this year (see SwissCore article), was heavily criticised by MP Mr Christian Ehler’s report on the implementation of the EIC and just lately managed to ramp up (see SwissCore article). At the EIC summit, EIC Board President Marc Ferguson acknowledged these difficulties by comparing the EIC to a start-up with some starting difficulties.
However, the EIC is thrilled to solve these problems. Commissioner Gabriel and Ferguson encourage companies and researchers with ambition and vision to continue to engage with the EIC in support of European innovation in the report’s conclusion and at the EIC summit. The financial potential is there, as the EIC work programme 2023, with a budget of €1.6 billion in grants and equity available to start-ups and innovators, demonstrates.