About the Flagship
Funding for deep tech scale ups focuses on measures that will accelerate the growth of deep-tech start-ups in the EU. Three actions under the funding for deep tech scale ups flagship are underway and one has not started yet.
Rebalancing debt-equity incentives
Transposal by Member States
Entry into force
On May 2022, the Commission put forward a proposal for a Directive on a debt-equity bias reduction allowance (DEBRA), aimed at encouraging companies to finance their investments through equity contributions rather than debt. Once adopted by the Council, the measure would allow businesses to realise more risk-bearing investments by increasing equity, instead of borrowing, making them more resilient.
Moreover, the proposal would encourage companies to decide more freely on their financial structure based on commercial considerations, rather than tax treatment. All non-financial corporations would be eligible for an allowance on new equity and small and medium-sized enterprises (SMEs) could receive a higher allowance compared to larger firms.
Feedback presented to the European Parliament and Council of the EU
In line with the objectives of the Commission’s 2020 Capital Markets Union (CMU) action plan, in December 2022 the Commission adopted a proposal for a Directive on a Listing Act. The measure would simplify and ease both initial and ongoing listing requirements for certain types of companies in order to reduce costs and increase legal certainty for issuers, while safeguarding investor protection and market integrity.
To allow certain founders and families to retain control post-listing, while raising a larger amount of funds and enjoying the benefits of going public, the Listing Act may also propose a minimum harmonisation of national legal regimes relating to dual class share structures across the EU.
European Scale-Up Action for Risk Capital (ESCALAR)
Expansion of the scheme under the InvestEU Programme
Building on a successful pilot, the European Scale-Up Action for Risk Capital (ESCALAR) mechanism will be expanded under the InvestEU Programme to attract untapped sources of private capital. In support of this, the Commission will convene leaders of large institutional investors (pension funds, insurance companies and asset managers, mainly) in May 2023, to explore opportunities and requirements for increasing investments into VC funds.
Together with the Member States and the EIB, the Commission will assess the complementarities between existing EU funding instruments and recent initiatives such as the European Tech Champions Initiative, with a view to addressing the scale-up gap for European deep-tech companies.
Innovation gender and diversity index
Start of selected projects
The EC will pilot an innovation gender and diversity index, which will include data on women and other less represented groups, including individuals with disabilities, in innovative start-ups and scale-ups, as well as amongst investors and funds investing in such companies. The call "Pilot European innovation gender and diversity index" (HORIZON-EIC-2022-GENDER-01) closed for applications on 8 September 2022: 13 proposals received, 11 evaluated, and now entering the ethics review phase.
EIT Women2Invest Programme
Selected women carrying out internships
Second call for expression of interest open
The Women2Invest Programme is an action that will be implemented through annual calls. It aims to support women with STEAM university studies to start their careers in venture investment by training them and matching them with investors. A first call for expressions of interest closed on 30 September 2022. So far, the EIT Women2Invest Programme trained 74 women, coming from 27 European countries.
The larger groups by nationality are from Spain (11), Germany (8), Italy (7), Romania (5), Greece (4), Turkey (4) and Ukraine (4). The training covered knowledge gaps to upskill women coming from diverse academic backgrounds in the investment industry. These women have now started eight-week internships in VC funds.