The European Innovation Council (EIC) and its accelerator blended finance
The once piloted European Innovation Council (EIC) takes off. The European Commission launched it last 18th March, which confirms that the European Innovation Council is reaching new heights. Europe is now fully scaling up its own innovation ecosystems with dedicated investments for breakthrough innovation and Scale Up wants to be part of all these great advances.
This article allows us to have a better understanding of the IEC itself and the IEC accelerator blended finance, comprehending how this funding mechanism encourages the challenges of innovation and works in favour of small and medium-sized enterprises by giving them blended finance.
The European Innovation Council within the Horizon Europe programme is an ambitious new initiative. With a budget of more than €10 billion dedicated to developing and expanding innovations, the EIC will scale-up breakthrough technologies and disruptive innovation. The new EIC accelerator establishes a new method based on equity support. Moving beyond the existing paradigm of money for science towards science for the market, the EIC forms part of the European Commission’s drive to build forward in the recovery stages of the global pandemic by making direct equity investments in companies.
Determined to identify, develop and scale-up breakthrough technologies and disruptive innovations, the EIC will support start-ups, SMEs and research teams developing high-risk, high-impact breakthrough innovation. This means that support is provided to potential game-changing solutions for the European green and digital transitions in the context of crisis recovery. The EIC will provide both grant funding and direct investment for start-ups through its €3 billion fund thus providing the capital to push Europe‘s world leading science to the market, notably addressing the substantial equity funding gap facing European start-ups.
Through strategic partners and a network of capital providers, the idea is to attract new investors, thus allowing risk sharing.
Following many years of piloting, the now launched EIC will use its lessons learned and achievements. During the 2018-2020 period, more than 10,000 European start-ups and innovators were enthusiastic in their applications to the EIC’s pilot actions. More than 5,000 start-ups, SMEs and research projects were supported with 159 companies selected to receive venture capital.
The new EIC fund guidelines, which will be published this spring, will provide all the necessary information about the principles of functioning. Applicants to this programme will pick between the investment component (which is devoted to fund market deployment and scale up) or the grant component, to reimburse eligible costs incurred for innovation activities at a maximum of 70%. Within this last option, they must also choose between a grant component only, where the applicant must show his financial capacity, or a grant component first, where the commercial potential of a novel technology or a scientific discovery must be yet boosted.
The awarded applicants will obtain funding and access to a range of Business Acceleration Services.
These exciting efforts to move European innovation and take it to the next level are also highly conscious of the big societal changes and expectations underway in Europe. Throughout this process of necessary change, the Scale Up Project is also committed to this new model based on innovation and digitization, in order to boost SMEs’ economic growth.
From Scale Up we strongly believe that with the EIC and its support for breakthrough technology and disruption, Europe’s excellent science can strive to build forward with excellent innovation.