In a bold move to strengthen its tech ecosystem, the European Commission has announced plans to launch a “Scaleup Europe Fund” worth at least €10 billion ($11.3 billion USD) to help European startups grow into global tech leaders. This initiative is part of the Commission’s newly unveiled “Choose Europe to Start and Scale” strategy, aimed at closing the innovation gap between the European Union, the United States, and China.
EU Strategy to Support High-Growth Tech Startups
Europe is behind its global competitors in producing unicorns, tech startups valued at over $1 billion. The European Commission highlighted key barriers to scale, including
- Fragmented regulations across 27 EU member states
- Limited access to late-stage venture capital
- Talent shortages
- Infrastructure challenges
- Bureaucratic and administrative burdens
With U.S. late-stage funding estimated to be seven times greater than in the EU, the new fund aims to reverse that trend and keep promising tech startups in Europe.
Scaleup Europe Fund: What We Know So Far
- Public-private fund expected to launch in 2026
- Backed by the European Commission and private investors
- Designed to take equity stakes in high-potential European tech companies
- Final fund size expected to be in the double-digit billion-euro range
- Managed by a private investment firm for efficiency and scalability
“We don’t want it to be a drop in the water. We want it to make a clear difference,” said an EU official familiar with the initiative.
Unlocking European Capital for Innovation
A critical issue has been the EU’s conservative investment environment. EU households hold most of their wealth in bank savings, with bank capital accounting for 300% of GDP, a stark contrast to 85% in the U.S., where more capital flows into startups and venture-backed growth.
To address this, the EU plans to accelerate its Savings and Investments Union, designed to channel private savings into startup financing and expand the private pension industry, thereby creating a long-term source of capital for innovation.
Additional Measures to Support EU Startups
As part of the broader “Choose Europe” strategy, the Commission is also proposing
- Simplified regulatory frameworks with reduced administrative burdens
- Easier public procurement access for innovative startups
- Fast-track immigration for non-EU startup founders to attract global talent
- Enhanced cross-border collaboration and investment within the EU
The Bigger Picture: Competing Globally
This move follows increasing concern that Europe is falling behind in areas such as artificial intelligence, biotech, green tech, and fintech. With U.S. and Chinese tech giants dominating global markets, the EU hopes its new strategy and funding mechanisms will create globally competitive tech champions from within Europe.
