November summit could also see British access to European fund for growing technology startups expand
British companies can access growth capital from the EU’s new multibillion Scaleup Europe Fund, the European Commission has confirmed.
The fund, which is just starting to make investments, has been developed by the EU to help grow companies in key technology sectors such as artificial intelligence, quantum technologies, robotics, biotechnologies, clean energy and space.
Access to growth capital to make promising technology startups into economy-boosting major companies has long been a stumbling block for both the UK and EU. It is a major policy focus for the UK’s Department for Business, Innovation, Science and Trade (Bist).
The European Commission has put €1 billion into the Scaleup Europe Fund, with a target of reaching €5bn after contributions by private and public partners. The fund is run by EQT, a Swedish investment firm, and the UK has not, to date, contributed to the fund.
The Commission has confirmed reporting by the technology news website Sifted that up to 5 per cent of the Scaleup Europe Fund’s capital can already be invested in the UK.
Geographical limits
A Commission spokesperson told Research Professional News that the fund’s principal scope covers companies established in the EU and countries associated with Horizon Europe equity instruments. Despite being associated to Horizon Europe, the UK does not currently have access to other equity investment mechanisms under the programme.
For the Scaleup Europe Fund, the spokesperson said that “a limited proportion of the portfolio (15 per cent outside of Europe, 5 per cent maximum in a single country) may be invested outside that geographical scope, subject to the limits and conditions set out in the fund documentation”.
They added that “all investments must comply with the fund’s investment strategy, exclusion rules and are subject to EQT’s portfolio construction approach”, and that “the EU budget contribution may be used only for investments meeting the applicable EU eligibility requirements”.
Summit could expand access
There is also hope that British access to the fund could increase if talks between the UK and EU progress. Earlier this year, Commission president Ursula von der Leyen and former British prime minister Keir Starmer agreed to hold talks on British participation in both the Scaleup Europe Fund and the European Innovation Council Fund, the €4bn venture capital investment wing of the EU’s major innovation funding agency, at a planned EU-UK summit.
The change in British government has pushed back plans for the EU-UK summit, but a new date has been set for 20 November.
A government spokesperson said “UK involvement in the European Innovation Council Fund and Scaleup Europe Fund could benefit both the UK and the EU”.
“No decisions have been taken while we explore options that are fair, represent best value for both sides, and which could drive innovation to grow our economies and improve lives,” they added.
Update 14 October – This article was updated with the date for the EU-UK summit after it was announced.
