European Commission to Encourage and Support Breakthrough Innovations
Over 40 European start-ups and small businesses will receive equity financing of around EUR 178 million through the European Innovation Council (EIC).
In order to boost and even remedy the lack of trust and the low level of investments induced by the current pandemic context and given that public financial resources are limited, the EIC Fund aims at suppressing the negative impact on start-ups and small business (SMEs). Its role is thoroughly emphasized by the fact that it is intended to support balance and have a significant contribution to sustainability, with a special focus on key sectors, such as health, resilience, and the green and digital transition.
Considering an overview, the European Commission has envisaged the Enhanced European Innovation Council pilot understood as an umbrella for several funding instruments, the EIC Pathfinder pilot and the EIC Accelerator pilot, which includes the EIC Fund.
The EIC Fund was established in 2020 by the European Commission with the objective to make direct capital and quasi-capital investments (between EUR 500,000 and EUR 15 million), being a first European financial leverage in the form of direct capital investments.
To whom it is addressed
EIC Funds are intended to help breakthrough innovation companies selected for the EIC Accelerator and support top-class innovators, start-ups, small companies and researchers with bright ideas that are radically different from existing products, services or business models, are highly risky and have the potential to scale up internationally.
What does it offer?
The EIC Fund is considered a support which could be enabled through the entire business innovation cycle, as foreseen by the applicant, being offered from the early stages of research. In a more practical perspective, EIC Funds help developing a concept into a market product or service, by various actual instruments, such as trials, prototyping, validation, demonstration, and testing. Also, direct grants are offered, based on applicants’ justifications.
The EIC acts also on another side, by offering, either through a specialized European organism or through networking systems with other larger firms or investors, free coaching on a wide range of business areas and business acceleration services and even further monitoring that should assure a growth for its applicants.
Long term goals
Being part of a wider plan, EIC aims at offering opportunities for entrepreneurs to grow, thus increasing innovation performance and innovation potential of the European Union, which could lead to a higher goal of not only contributing and creating high quality jobs, but also stimulate economic growth.
Understanding and accepting the importance of start-ups and SMEs as a source of innovation, the European Commission envisaged EIC Funds as a tool that could be able to cover the lack of resources which such organisms face. However, this pilot action will also focus on transnational and mutual learning which will allow to create an enhancing, supporting and cooperative environment across EU.