European scaleups need greater involvement from the bloc’s institutional investors, the European Commission said this week when unveiling an EU startup “and scaleup” strategy.
It said that some EU countries had launched initiatives to mobilise institutional investors for venture capital (VC) investment, but that on the whole European institutional investors played a limited role in the European VC market.
“Between 2013 and 2023, pension funds accounted for only 7% of VC funding in the EU,” it said, citing figures from France Digitale, a French association that promotes a digital economy.
The Commission said the Savings and Investments Union (SIU) initiative would be key to unlocking more financing and investment opportunities in the EU, but that its startup strategy will complement this, for example by aiming to expand and simplify the European Innovation Council (EIC) and deploy a Scaleup Europe Fund to help bridge the financing gap of deep tech scale-up companies.
It also said that, in coordination with the EIB Group, it plans to work with European institutional investors to develop a voluntary ‘European Innovation Investment Pact’ for those who commit to invest part of their assets under management into EU funds-of-funds, venture capital funds and unlisted scaleups.
The new strategy also foresees measures to foster a friendlier operating environment for startups and scaleups, support market uptake and expansion, and facilitating startups and scaleups’ access to infrastructure, networks and service.
“With the launch of the EU Startup and Scaleup Strategy, we unlock growth drivers for Europe’s most innovative and promising companies,” said Stéphane Séjourné, Commission executive vice-president for prosperity and industrial strategy.
“We cut red tape, we facilitate their access to financing, we improve their ability to do business across our Single Market. In other words, we want to put Europe right in the middle of the global innovation map, for companies and investors.”
