Flagship 1: Funding for deep tech scale ups

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.

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.

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.

A closed call for expression of interest under InvestEU closed on 31 January 2024. The EIF has set aside a minimum amount of EUR 300m of InvestEU Fund to deploy under the ESCALAR closed call. In response to the call, the EIF has received applications from 18 funds. The EIF investment managers are currently screening the proposals and first signatures under ESCALAR are expected between end of 2024 and Q1 2025.

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.

Two groups of 131 beneficiaries from 25 European nationalities have already followed 8-week internships in VC funds under the programme. Additional groups will be selected in 2024-2025.

At the Competitiveness Council in December 2022, following the adoption of Council Conclusions on New European Innovation Agenda (NEIA), the Commission launched a call to governments to announce actions in support of the NEIA. This announcement was based on the understanding that full support and engagement from the Member States and Associated Countries is needed to ensure the implementation of the NEIA. 

The actions were gathered through the EIC Forum, a group of Member States and Associated Countries' public authorities and bodies in charge of innovation policies and programmes, with the aim of promoting coordination and dialogue on the development of the Union's innovation ecosystem.