European Investment Bank aims to mobilise €80 billion for European scale-ups

The European Investment Bank (EIB) is significantly expanding its programme for fast-growing tech companies. With the second phase of the European Tech Champions Initiative (ETCI 2.0), the bank aims to unlock up to €80 billion in investment for more than 1,500 European scale-ups. To that end, it is targeting a maximum of €15 billion in investor commitments.

The initiative is a direct successor to ETCI 1, which was set up with initial resources of €3.9 billion and had the goal of mobilising more than €20 billion in investment for innovative European growth companies. With the new phase, those ambitions are being scaled up considerably, both in target and in scope.

How the initiative works

ETCI operates as a fund-of-funds structure: the EIB pools capital from public and private parties and invests it in scale-ups through existing European venture capital funds. This means the EIB does not need to make direct investment selections on a company-by-company basis, but instead strengthens funds that already do so.

ETCI 1 focused on bridging the capital gap for European tech companies in the late growth stage, the so-called growth equity phase. Many European scale-ups find themselves compelled at that stage to raise capital outside Europe, particularly in the United States. The initiative seeks to break that pattern by making large-scale European capital available through trusted fund managers.

Under ETCI 2.0, the maximum fund size rises to €15 billion in committed capital. The expected leverage effect, whereby each euro of public or institutional capital attracts additional private capital, is projected to bring the total mobilised investment to €80 billion over time. That figure is a target, not a guaranteed outcome.

Background of ETCI

The European Tech Champions Initiative was established several years ago in response to a structural problem in the European startup ecosystem. While American and Asian tech companies have relatively easy access to large-scale growth financing, Europe has often lacked the large-scale, late-stage venture capital needed to scale rapidly without leaving the home market.

The EIB plays a catalysing role in this initiative: by acting as an anchor investor in European growth funds, it aims to draw in institutional investors such as pension funds and insurers. These parties have traditionally been cautious about venture capital due to its risk profile, but EIB participation effectively lowers that threshold in practice.

ETCI 1 already targeted sectors such as software, biotech, cleantech and semiconductors. The second phase appears to maintain that broad sectoral focus, although no detailed investment criteria for ETCI 2.0 had been published at the time of writing.

Significance for the Dutch and European ecosystem

The initiative is relevant for Dutch scale-ups, even though the EIB does not work directly with individual companies. Access to ETCI capital runs through the funds financed by the programme. Growth companies that already have a relationship with European growth funds, or are actively seeking one, can benefit indirectly through that route.

The Netherlands has in recent years produced a growing number of tech companies reaching the growth stage, notably in areas such as AI, cybersecurity and climate tech. The availability of large-scale European capital represents a relevant alternative for those companies to American venture rounds, which typically come with pressure to relocate operations to the US.

For investors and fund managers in the Netherlands and elsewhere in Europe, the key question is whether ETCI 2.0 will succeed in achieving its ambitious leverage target. The gap between €15 billion in commitments and €80 billion in total investment presupposes a substantial contribution from private capital. Whether that multiplier is achievable depends in part on the macroeconomic climate and the risk appetite of institutional investors in the years ahead. The first phase already delivered a projected leverage towards €20 billion from €3.9 billion in initial resources, which sets a cautious precedent for the step change now being pursued.