1、Startups backed by the EUs Framework ProgrammesGrants and Direct Equity SupportExploring the EU-backed tech ecosystem March 202530.10.2024WARSAW,POLANDCENTRAL HOUSE OF TECHNOLOGYThe EU-backed startup ecosystem16 October 2024LuxembourgProject facilitatorInnovation Radar BridgeJoint project to connect

2、 startups,investors and policymakersMedia partnerData and researchPublic partnersSupport with data and providersThis report is part of the IR bridge projecthttps:/ Supported by Created byPage/2 Accelerating EuropeAbout the state of European growth and the relationship with innovation,competitiveness

3、,entrepreneurship and venture capital:challenges and opportunitiesThis report is part two of three,as part of the Innovation Radar BridgeEU Framework ProgrammesData-driven deep dive into EU framework programmes and their impact.EU-backed in this report refers to startups funded under the EU framewor

4、k programmesTech transfersDeep dive into the university spinout ecosystem in EuropeThis reportWork in ProgressFeb 2025Coming late 2025Page/3 IntroductionEurope has invested hundreds of billions to support innovation.But how effective has this been?This report breaks down the EUs grants and direct eq

5、uity support for startups for the first time.Specifically,this report provides an analysis of the startups backed by Europes Framework Programmes:The first chapter provides an overview of the ways the EU funds startups.The second section looks at the performance of these startups.The final section o

6、utlines observations and recommendations to enhance future Framework Programmes.By combining exclusive EU data with Dealroom data and insights from industry leaders,this report aims to inform policy decisions,inspire private investment and catalyze growth in Europes tech ecosystem.Page/4 Key Insight

7、sStartups:Pillars of EU GrowthHorizon Europe(FP9)is the worlds biggest public innovation funding programme,with 95B fundingStartups supported under this framework are driving innovation and economic value,creating 520B in enterprise value with just 12B in EU fundingDespite their proven ROI,startups

8、have received only 5%of EU research and innovation fundingStrategic Sectoral FocusEU-backed startups operate in critical sectors like Climate Tech,Deep Tech,AI,Biotech,and Space.80%of these startups develop physical technologies,in contrast to the broader ecosystems SaaS focusPhysical Tech startups

9、have a higher graduation rate when EU-backedMost EU-backed startups are early stage,presenting an opportunity to leverage their growth potentialRecommendationsExpand Startup InvestmentIncrease the funding allocation to startups in Horizon Europes successor programme(FP10)to capitalize on their measu

10、rable economic and societal impactStreamline Support MechanismsConsolidate fragmented programmes into a single pathway for grants,equity,and mentorship drawing on the current work of ESNA and the EICPromote VisibilityScale up EU startup summits and pitch days to connect EU-backed startups with priva

11、te investors and corporatesLeverage Digital PlatformsScaleup existing tools such as Dealfllow.eu and Innovation Radar with real time startup insights and matchmaking to empower stakeholdersThe EU must act decisively to strengthen its startup ecosystem,ensuring sustained innovation and global competi

12、tiveness.Bullish and confident ESNAGraduation etcWorlds biggest public funded innovation networkAdoption by private capitalSource:Dealroom.coPage/5 Only 5%of the EUs innovation funding goes to startups directly and this 5%startup funding drives objectively measurable economic success225BEU Innovatio

13、n Funding5%to startups12BEU70BVenture Capital520B Enterprise ValueEU programmes are a major backer of frontier technologies%EU-backed%not EU-backed(number of startups).and EU-backed physical tech startups have higher graduation rates EU-backed Physical Tech Not EU-backed Physical TechSelected insigh

14、ts from this reportSource:Dealroom.coPage/6 Innovation platform for EU startupsDealflow.eu is the premier platform connecting EU startups with investors,corporates,and ecosystem enablers.Backed by the European Commission,it combines deep expertise in venture capital with a mission to empower EU inno

15、vations.With more than 500 investors and 100 corporates in their network,Dealflow.eu has been facilitating more than 1,000 introductions and has supported Europes most promising deep tech startups.Dealflow.eu has also launched Ventures.eu,a fund dedicated to investing in the best EU-backed founders.

16、Massive funding gap with US,especially at the critical breakout and lae stages In fact,85%of the$30bn funding gap in 2023 between New Palo Alto and the Bay Area is at the critical scale up stageLeading online magazine for EU techEU startups writes about internet and tech startups out of Europe and p

17、rovide our readers with data-driven analysis,interviews and startup-related news.In addition to its focus on young technology companies,EU startups also publishes other kinds of news out of the tech-space that has a commercial or cultural impact on startups in Europe.Each month,EU-S reaches an audie

18、nce of more than 300,000 startup-interested and tech savvy people from across Europe.Tech ecosystem intelligenceDealroom.co is a global intelligence platform for discovering and tracking the most promising companies,technologies and ecosystems.Clients include many of the worlds foremost organization

19、s such as Accel,Index Ventures,McKinsey,BCG,Deloitte,Google,AWS,Microsoft,Stripe.Dealroom partners closely with local tech ecosystem development agencies and enablers,to create a comprehensive multi-dimensional blueprint of the tech ecosystem,including capital,talent,innovation,entrepreneurship and

20、overall economic dynamism.Page/7 Development of mRNA platform that will later be used to develop the Covid-19 vaccineCovid-19 vaccine Tozinameran becomes the first widely authorized Covid-19 vaccine9.4 million in EU funding during high-risk yearsSuccess stories:BioNTech is an example of the importan

21、ce of government supportBioNTech is founded as a spinout from Mainz University.Its focus is on individualized cancer medicine:tailor-made immunotherapy for each individual patient based on the genetic features of the tumor.The company began with a big large investment from MIG Capital and AT Impf/AT

22、HOS.2008Jan 2018225M Series AOct 2019IPO on NASDAQ$3.4B valueJan2020Today,BioNTech is valued$27 billion.BioNTech boasts a diverse oncology pipeline,featuring innovative mRNA-based therapies,cell therapies,and antibody treatments targeting various cancers.The company is leveraging its mRNA expertise

23、to develop vaccines for infectious diseases beyond COVID-19,including malaria,tuberculosis,and HIV.BioNTech aims to have ten or more potentially registrational trials by the end of 2024,positioning itself for significant clinical advancements.The pipeline includes 11 ongoing Phase 2 and 3 trials,wit

24、h the first wave of oncology product launches anticipated from 2026 onwards.BioNTechs increased R&D investment and focus on combination therapies underscore its commitment to developing tailored,cutting-edge treatments for unmet medical needs.Project“lightspeed”started to develop Covid-19 vaccine(an

25、nounced in March 2020)Now$425 million partnership with Pfizer to develop mRNA vaccines for influenza(flu)Source:Dealroom.coPage/8 ARM was an important beneficiary of one of the EUs Framework Programmes in the mid 1990s(Open Microprocessor Initiative)Government support plays a vital role in fostering

26、 innovation,especially for cutting-edge,early-stage technologies.By creating a collaborative ecosystem where public investment complements industry efforts,we can unlock groundbreaking advancements and ensure that startups have the resources they need to scale and thrive within local tech ecosystems

27、.Hermann HauserCo-founder and Venture Partner at Amadeus Capital PartnersPage/8 As co-founder of Acorn Computers,Hermann was also a founding force behind ARM.In 1990,he played a pivotal role in spinning out Advanced RISC Machines(ARM)from Acorn.Later,he argued for an independent ARM during the revie

28、w of a proposed NVIDIA takeoveran approach that,in hindsight,proved remarkably foresighted.More on Hermann Hauser“”Page/9 1 How the EU Commission funds innovation2 Tracking EU-backed startups3 Conclusions&recommendationsAppendix:Methodology Page/9 Page/10 Focus of this reportThree main structures to

29、 support innovation:Framework Programmes,EIB,and EIFFramework Programmes(currently Horizon Europe)RoleDirect grants and funding to researchers,innovators,and organizationsDrive research,and groundbreaking innovationsContribute to balanced and steady development of the EU internal market by providing

30、 long-term financing,guarantees,and advice(Venture)Debt&Co-investments in strategic and high-growth sectors+provides the EIF with 21B in resourcesProvides financing across all innovation stages,from pre-seed to post-IPO,by supporting the funding ecosystem:PE,VC,Infrastructure,and Private Credit fund

31、s for EIF equity investments;Banks for EIF debt investmentsHow its fundedDirectly funded by the EU budget and operated by the European Commission and some Public Private PartnershipsUnlike EIB and EIF,not an institution but a programme.Works in sync with EUs 7 year budget cycle Development bank of t

32、he EU with 250B capital from EU member states(10%paid in,remainder callable)Additional funding via issuance of Bonds(435B outstanding)60%owned by EIB,27%by EU,10%by public&private institutions incl KfW,Bpifrance,CDPManages 140B from the EC,Member States,EIB,and institutional investorsSize&impact95 b

33、illion during 20212027,contributing to advancing European competitiveness and creating a thriving ecosystem for research and innovation88B in new financing signed in 2023,mobilizing investments across key sectors8B deployed(Venture Debt and Equity Co-investing)to date in more than 330 European start

34、ups in life science,deeptech,cleantech and green economy270B projected total investment impact within the EU by 2027,adding 1.03%to EU GDP and creating 1.46 million jobsSince its inception,committed over 52B in 1.5K+funds,of which 25bn into VC fundsHolds the largest portfolio of private asset funds

35、in EuropeMore than 2.1M European SMEs were financed through equity and guarantee investmentsSupportedFull list of supported startups on Dealflow Full list of supported companies on Dealflow Full list of EIF supported investors on Dealflow Source:Dealroom.coPage/11 *The EU budget operates on a seven-

36、year framework,known as the Multiannual Financial Framework(MFF)*Allocation of RFF in Appendix:Methodology,but 57%directly to countries and 5 billion went to Horizon Europe and 6 billion to InvestEU.About 10%of the EU budget goes to direct innovation supportIll suggest a more visually appealing and

37、accessible color scheme for this diagram:1.Main funding boxes(currently light blue):-Use a soft sage green(#E8F3E8)for the 120B/year box-Use a light warm beige(#F5F0E6)for the 50B/year box-Keep the yellow-tinted box(#FFF8E7)for the 115B/year borrowing section2.Central boxes:-European Commission box:

38、Use a deeper steel blue(#D4E5F7)-Core EU Budget box:Use a slightly darker steel blue(#C0D8F0)-RRF box:Keep it distinct with a light gray-blue(#E6EEF5)3.Right-side spending categories:-Replace the current light boxes with a gradient of coordinating colors:-Cohesion(30%):Soft teal(#E0F0F0)-Agriculture

39、(30%):Light olive(#E8F0E0)-Innovation(10%):Keep the current purple but soften it(#E6E0F0)-Green Transition(10%):Soft mint(#E0F0E8)-Other categories:Use progressively lighter neutral tones4.Connector lines:-Use darker versions of the box colors they connect-Main flow lines could be a deep navy(#2B457

40、0)-Secondary connections in a medium gray(#6B7280)This color scheme would:-Maintain visual hierarchy-Improve readability-Create better visual flow-Ensure sufficient contrast for accessibility-Keep related elements visually connected through color familiesWould you like me to create a specific implem

41、entation of this color scheme using an SVG or React component?European Commission33 Directorate Generals(ministries)30%Common Agricultural Policy(CAP)Supports farmers and sustainable agriculture to ensure food security.10%InnovationHorizon Europe 5%Rest:InvestEU,Digital Europe,and European Space Pro

42、gram10%Green Transition&Climate6%Administrative Expenses 6%Foreign Policy 8%Other(e.g.,Erasmus+,Security)30%Cohesion and Regional DevelopmentReduces disparities and promotes balanced growth across EU regions.170 billion/year Core EU Budget*1%of EU27 GDPEIB&EIFTwo independent entities that work close

43、ly alongside EU and support in various Programmes120 billion/yearfrom Nation Contributions0.7%of EUs GDP70%of EUs Core EU BudgetSpending categoriesSources of funding50 billion/yearfrom Own Resources including customs duties,VAT-based contributions,and other 115B/yearBorrowing from financial marketsN

44、extGenerationEU bonds(2020 to 2025)(AAA-rated and typically heavily oversubscribed)Recovery and Resilience Facility(RRF)*Page/12 A complex system:EU Member States,the EC,EIB,EIF,and Framework ProgrammesCoordinating roleUse of funding/programmeSource of fundingEU“core”Budget1%of EU GDP7-year Multiann

45、ual Financial Framework(MFF)*170 billion annually,1.2 trillion for 2021-2027Funds the EUs policies and activities*Draghi report mentions downside of long-cycle and inflexibility to respond to new developmentsEuropean Investment Fund(EIF)60%owned by EIB,27%by EU,10%by public&private institutions incl

46、 KfW,Bpifrance,CDPSpecialist arm of(EIB)focus on SMEs,enhancing their access to financeSMEs and Venture Capital EIF plays a significant role in implementing EU financial instruments under Programmes like InvestEUEuropean Investment Bank(EIB)Independent institution 250 billion capital from EU member

47、states(of which 10%paid in,the remainder callable)+435B bonds outstandinglarge-scale funding for infrastructure,green projects,and innovation through loansAAA ratingCapital increases are rareEuropean Commission(EC)Organised along Directorate-Generals(DGs)DGs=Equivalent to Ministries at the EU levelC

48、omposed of 33 Directorate GeneralsCommissioner=political appointeeSome key DGs for innovation are DG Research and Innovation(DG RTD)and DG CNECT but many others involved tooEIC 10B over 20212027Framework Programmes(FP)FP9=Horizon Europe 95BMain EU funding instrument for research and innovation27 EU

49、Member StatesTypically 50%of individual states GDP is government,of which 1%allocated to EU budgetInvestments in VC fundsIn 2023,committed 2.8B to 78 VC funds.To date,committed 22B InvestEU26.2B(EU guarantee)to mobilize over 370B in investments in strategic projects(clean tech,green energy,digital i

50、nfrastructure)Loans,guarantees,equity investmentsMobilize capital in strategic projectsEU BondsAdditional borrowing from financial markets NextGenerationEU(NGEU)launched in 2020 Created during COVID,to strengthen the focus on green and digital investment,and allowed the overall budget to go from 1.2

51、 to 2 trillionBonds have AAA rating and are typically heavily oversubscribed EIC FundEquity investments to startups 3.5B over 20212027EIC Grants to startups and SMEs 6.5B over 20212027(Venture)Debt and Co-investments5.6B equity commitments in 23ERC 16B over 20212027Grants to groundbreaking researchE

52、IT 3B over 20212027(+funding from private partners)Grants/co-investingDGs and agencies53B over 20212027Individual calls for proposalEU Chips Act43B semiconductor financing programme with 3.3B direct EC fundingHeres an improved and refined version of the overview:1.European Investment Bank(EIB)-What

53、it is:The EUs development bank that provides financing(mainly loans)for large infrastructure projects,green transitions,innovation,and SMEs.-Financing Source:-Own capital:Subscribed capital from EU member states(250 billion).-Market funding:The EIB raises most of its funds by issuing bonds in financ

54、ial markets.-EU budget contributions:The EU budget sometimes co-funds specific EIB initiatives(e.g.,through guarantees like InvestEU).-Relationship with EIF:The EIB owns 63%of the EIF and relies on it to focus on smaller businesses and venture capital activities.2.European Investment Fund(EIF)-What

55、it is:A specialized institution that supports European SMEs,startups,and innovation through venture capital,private equity,and guarantees for financial intermediaries(e.g.,VC funds and banks).-Financing Source:-EIB ownership:The EIB provides the majority of the EIFs capital(63%).-EU budget Programme

56、s:The EIF manages funding from Programmes like Horizon Europe,InvestEU,and COSME.-Private sector:The EIF attracts co-investments from financial institutions and private investors.-Relationship with EIC:The EIF does not directly manage the EIC Fund but complements EU innovation initiatives by investi

57、ng in VC funds that target high-growth startups,including some deep tech sectors.3.European Innovation Council(EIC)-What it is:A funding body under Horizon Europe that supports breakthrough innovations and deep tech startups,especially those with“high-risk,high-reward”potential.-Financing Source:-EU

58、 budget:Funded through Horizon Europe(10 billion for 20212027).-EIC Fund(equity funding):Provides equity financing for startups and scale-ups selected through the EIC Accelerator.-Role of the EIB:The EIB,not the EIF,performs due diligence and manages equity operations for the EIC Fund,as well as pro

59、viding loans or guarantees for certain innovation projects.How They Relate:-EIB owns EIF:The EIF is the venture capital and SME-focused arm of the EIB Group.-EIC Fund managed by EIB:The EIB,not the EIF,implements the EIC Funds equity investments for high-risk startups.-EU Budget Synergy:The EIB and

60、EIF use EU budget guarantees(e.g.,InvestEU,Horizon Europe)to de-risk investments and attract private capital.In Summary:-The EIB provides large-scale funding for infrastructure,green projects,and innovation through loans.-The EIF,as part of the EIB Group,focuses on equity,guarantees,and venture capi

61、tal for SMEs and startups through fund-of-funds structures and guarantees.-The EIC funds deep tech startups via a mix of direct grants and equity investments managed by the EIB(not the EIF).This version clarifies the roles and avoids the incorrect assumption that the EIF directly manages the EIC Fun

62、d.Let me know if youd like further adjustments!EIFs Impact:Manages 140bn from the European Commission,European Member States,the European Investment Bank,and institutional investors.2.1m European SMEs financed through equity and guarantee investments.Committed over 43bn since its inception in 1.5K+f

63、unds,of which 22bn into VC funds.Holds the largest portfolio of private asset funds in Europe.EIFs Role:Market developer:invests in new teams,markets,and segments,unlocking untapped opportunities.Market catalyst:supports funds with unrealized track records,providing a seal of quality and fostering b

64、est practices.Market access:leverages relationships with established funds,ensuring access to oversubscribed,high-quality opportunities.25 billionApply/more info 53.5 billionApply/more info 13.5 billionApply/more info 3.4 billionApply/more info Simplification of EU architecture.There are programmes

65、such as DIGITAL,LIFE,EU Space Programme etc.not listed here for brevity.Page/13 50Bover 7 years80Bover 7 years95Bover 7 yearsNext page for detailsFuture program2007 2013 FP7FP8FP9This report mainly focuses on Horizon Europe,and its two preceding Framework Programmes:FP7 and Horizon 2020,with a high-

66、level glance at earlier FPsSource:Dealroom.co FP=Framework ProgrammeFP102014 20202021 2027Current Framework Program2028 20351984 2006 60Bover 22 yearsFP1-6Page/14 Horizon Europe is organised across three pillars,plus a horizontal programSource:Dealroom.coHorizon Europe,the EUs flagship research and

67、innovation program for 20212027,has a total budget of approximately 95.5 billion.This budget is allocated across three main pillars and a horizontal focus area:1.Pillar I:Excellent ScienceBudget:25 billionFocus:Enhancing the EUs scientific capabilities through:European Research Council(ERC):Funding

68、frontier research.Marie Skodowska-Curie Actions(MSCA):Supporting researcher mobility and training.Research Infrastructures:Developing and integrating world-class research facilities.2.Pillar II:Global Challenges and European Industrial CompetitivenessBudget:53.5 billionFocus:Addressing societal chal

69、lenges and enhancing industrial competitiveness through clusters in areas such as:HealthCulture,Creativity,and Inclusive SocietyCivil Security for SocietyDigital,Industry,and SpaceClimate,Energy,and MobilityFood,Bioeconomy,Natural Resources,Agriculture,and Environment3.Pillar III:Innovative EuropeBu

70、dget:13.5 billionFocus:Stimulating Europes innovation landscape by:European Innovation Council(EIC):Supporting breakthrough innovations.European Innovation Ecosystems:Connecting regional and national innovation actors.European Institute of Innovation and Technology(EIT):Integrating education,researc

71、h,and innovation.4.Horizontal Focus Area:Widening Participation and Strengthening the European Research AreaBudget:3.4 billionFocus:Enhancing research and innovation capacities across Europe,ensuring broader participation and strengthening the European Research Area.These allocations aim to bolster

72、the EUs position in research,address pressing global challenges,and drive innovation-led economic growth.Excellent Science(25B)ERC:16BMSCA:6.6BInfrastructures:2.4BGlobal Challenges&Industrial competitive-ness(53.5B)Health:8.2BDigital/Industry:15.3BClimate/Energy:15.1BInnovative Europe(13.5B)EIC:10.1

73、BInnovation Ecosystems:0.5BEIT:10.1BWidening Participation&ERA(3.4B)Spreading Excellence:2.9BR&I System:0.5BExcellent Science(25 billion):Funds frontier research(ERC,16 billion),researcher mobility and training(Marie Skodowska-Curie Actions,6.6 billion),and research infrastructure(2.4 billion)to boo

74、st EU scientific excellence.Global Challenges and Industrial Competitiveness(53.5 billion):Supports large collaborative projects across six thematic areas(health,digital,climate,food,etc.)and funds EU Missions addressing societal challenges like cancer,smart cities,and climate action.Innovative Euro

75、pe(13.6 billion):Focuses on disruptive innovation and scaling startups through the European Innovation Council(EIC,10.1 billion)with grants,equity investments(EIC Fund),and a one-stop-shop for innovators.There is also a horizontal program(3.4 billion)to support less-developed regions in building res

76、earch and innovation capacity.EIC FundEquity investments to startups 3.5B over 20212027EIC Pathfinder,Accelerator,Transition,StepGrants to startups and SMEs 6.5B over 20212027Supports large collaborative projects across six thematic areasDigital/Industry/Space:15.3BClimate/Energy/Mobility:15.1BFood/

77、Bioeconomy/Agri/Environment:8.9BHealth:8.2BCulture/Creativity/Inclusive Society:2.3BCivil Security for Society:1.6BFunds EU Missions addressing societal challenges like cancer,smart cities,and climate actionManaged by DGs(RTD,CNECT,ENER,CLIMA,)alongside Joint Research Centres(JRCs)and Public-Private

78、 Partnerships(PPPs).The EU publishes“calls”for project proposals.Researchers,companies,and institutions can apply and often do as consortia.Pillar IIBig global challenges&competitiveness 25 billionEuropean Research Council(ERC)Funding frontier research 16.1B Marie Skodowska-Curie Actions(MSCA)Suppor

79、t researcher mobility&training 6.6B Research InfrastructuresDeveloping and integrating world-class research facilities2.4B Pillar IIIDisruptive innovation&startups 25 billionEuropean Research Council(ERC)Funding frontier research 16.1B Marie Skodowska-Curie Actions(MSCA)Support researcher mobility&t

80、raining 6.6B Research InfrastructuresDeveloping and integrating world-class research facilities2.4B Horizontal program Widen participation across Europe25 billionEuropean Research Council(ERC)Funding frontier research 16.1B Marie Skodowska-Curie Actions(MSCA)Support researcher mobility&training 6.6B

81、 Research InfrastructuresDeveloping and integrating world-class research facilities2.4B Pillar IScientific Breakthroughs25 billionSupports large collaborative projects across six thematic areasDigital/Industry/Space:15.3BClimate/Energy/Mobility:15.1BFood/Bioeconomy/Agri/Environment:8.9BHealth:8.2BCu

82、lture/Creativity/Inclusive Society:2.3BCivil Security for Society:1.6BFunds EU Missions addressing societal challenges like cancer,smart cities,and climate actionManaged by DGs(RTD,CNECT,ENER,CLIMA,)alongside Joint Research Centres(JRCs)and Public-Private Partnerships(PPPs).The EU publishes“calls”fo

83、r project proposals.Researchers,companies,and institutions can apply and often do as consortia.Pillar IIScientific Breakthroughs53.5 billionEIC&EIC Fund6.5B for grants(Accelerator/Transition/Pathfinder)3.5B for equityOne-stop-shop approach:Pathfinder,Accelerator,Transition,Step,EIT FundInnovation Ec

84、osystemsStrengthens collaboration via ecosystem-building activities and innovation networks 0.5BEuropean Institute of Innovation and Technology(EIT)Funds&accelerates key sectors like climate,health,and digital3BPillar IIIDisruptive innovation&startups 13.5 billionSupport less-developed regions in bu

85、ilding research and innovation capacitySpreading ExcellenceSupporting research and innovation capacity2.9BR&I SystemPromotes collaboration and knowledge sharing among research institutions0.5BManaged primarily by the European Commissions DG RTD with support from agencies like REA and JRC.Horizontal

86、program Widen participation across Europe3.4 billionPage/15 Prototyping(TRL 4-5)True environment testingCommercial demosTRL 6-9LIFE program(900M/y)Grants up to 60-70%of costsEoghanSlide#12Pillar II is huge,bigger than ERC(and the mean TRL is higher than ERC).It should not be absent!Maybe Pillar II r

87、eplaces ERC here?%of Pillar 2 money going to SMEs(I guess it is approx 15%)will be around 7bn(tbc).This is about 50%of the total budget that ERC has(most of which goes to universities).Related:ERC has not embraced IR at all(zero use of it).Pillar II uses IR.This report could be a catalyst to get ERC

88、 to use IR(maybe it becomes a recommendation.)Within Horizon Europe,EIC,ERC,and EIT play a critical role for(Deep)Tech startupsSource:Dealroom.co,Deaflow.eu.EIC 2025 work programme.Stages based on Technology Readiness Levels used by governments.Go to market(TRL 6-7)ProductionIn operationRecruit new

89、skillsExperiments(TRL 1-3)Concept generationAnalytical proofLab testing Growth phase(TRL 8-9)CommercialiseRecruit new skillsScale techTRL 1-4EIC Pathfinder(262M/y)Grants up to 4MTRL 1-3ERC(2.5bn/y)Grants up to 10MGeneralist VC funds(Lakestar,Atomico,LocalGlobe,Balderton,Index,.)TRL 3-6 EIC Transitio

90、n(98M/y)Grants up to 2.5MTRL 6-8EIC Accelerator(634M/y)Grants up to 2.5MEquity 0.5-10MTRL 8-9EIC Step(300M/y)Equity 10-30MTRL 4-6 Eurostars(250M/y)Max.Grant depends on countryDeep Tech investors(Elaia,Promus,OTB,Air Street)Tech Transfer OfficesUniversities research facultyCorporate sponsors(e.g.phar

91、ma,industry,semiconductors)Angel investorsTRL 4-9EIT(430M/y)Max.grant depends on programPillar II supports startups&innovations at all stages via calls for proposalsPage/16 Source:Dealroom.co,*EIC impact report 2023 The EIC has been crucial in bridging the gap between public and private fundingThe E

92、uropean Innovation Council(EIC)allocates over 10B from Horizon Europe to support startups with disruptive technologies through grants and equity.Its programmesPathfinder(TRL 1-3),Transition(TRL 4-6),and Accelerator(TRL 6-8)support 4,600 startups,including 250 valued over 100M,25 over 500M,and 12 uni

93、corns.Despite backing one-third of the 13,600 EU-funded startups,only 10%of Horizon Europes 95B budget goes to the EIC.Selected EIC unicornsBy channelling 10 billion into pioneering startups,the EIC not only accelerates advancements in critical areas like climate tech,quantum computing,and biotech b

94、ut also strengthens Europes industrial competitiveness and strategic independence.The EICs impact goes beyond fundingits about creating a thriving ecosystem where innovators can scale their ideas,attract global investment,and contribute to Europes green and digital transition.“Stphane OuakiHead of D

95、epartment at EIC&EISMEADesign WIP”Page/17 The EIC Fund invests in the best founders coming out of the EIC Accelerator3.5B of the EIC budget is allocated to the EIC Fund for direct equity investments of up to 15M into startups selected from the EIC Accelerator.The EIC Fund,launched as a pilot in 2018

96、,now has over 250 portfolio companies.View EIC Fund portfolioIts portfolio includes 53 companies with a valuation above 100M and 4 companies with a valuation above 500M.Top EIC Fund co-investorsSource:Dealroom.coDesign WIPBPI FranceCDP Venture CapitalEnterprise IrelandInvierteEIT InnoEnergyInvest-NL

97、Verve VenturesLIFTT SpAB2ventureMP PENSJONThe funding by the EIC accelerator program was a key anchor point for our Series-A investment round.The capital was essential to de-risk our investment case sufficiently for more private investors to participate in the funding round.“”Jan GoetzCEO&Co-Founder

98、IQM Quantum Computer Page/18 1 How the EU Commission funds innovation2 Tracking EU-backed startups3 Conclusions&recommendationsAppendix:MethodologyPage/18 Page/19 Only 5%of the EUs direct innovation funding since 2007 goes to startups directly 225BEU Innovation Funding(FP7,Horizon 2020,Horizon Europ

99、e)12%(30K SMEs)5%*12BCorporatesR&DUniversities13,600 startupsCompanies designed to grow fast,generally VC-backable.Excludes non-startup SMEs:consulting firms,agencies,etc.Source:Dealroom.co,Dashboard.tech.ec.europa.eu.*Since detailed grant funding data per company is not always available,we estimate

100、d the share received by startups based on their proportion among total SMEs,cross-checked against available startup grant data from Dealroom and CordisPage/20 Pre fundingVC-backed companies by stage$1B+valuation outcomesData has made the journey of these 13,600 startups highly visible and trackable.

101、Source:Dealroom.co Includes startups HQ or Founded in Europe and Israel,including closed or exited companies.*ARM is included in the EU-backed funnel due to EU funding it received through FP1 and FP7 programs.$100B+$10B-100B$1B-10B 5631*8%7%7%12%9%33%12%3.5KEarly stage companies(100M total funding)9

102、.2K EU-backed startups with no funding(7.2K)or undisclosed funding(2K)400 First-time funded startups per year12%Share of total startups in EuropePage/21$100M+revenueThoroughbredsSource:Dealroom.co Includes startups HQ or Founded in Europe and Israel,including closed or exited companies Funnel only i

103、ncludes companies with disclosed VC investment amounts.$025M revenuePre funding$25100M revenueColts186$25100M revenues21$100200M revenues10$200500M revenues14$500M+revenues6.3K I think this could either be removed(we are aiming at investors)or(maybe better)blend it into the Only 5%of EU-innovation f

104、unding goes to startups observation.graduation rates are higher merits an observation that stands on its own I think(replace“Overall complexity is a barrier to apply”?).It is a key-and powerful-finding that will drive recommendationsOnly 5%of EU-innovation funding goes to startupsThe EU has invested

105、 more than 225B from the last three framework programmes,through dedicated R&I funding programsStartups are a key pillar for Europes future,but only 5%of EU innovation funding goes to themGlobally,startups have become a dominant source of innovation,productivity growth and value creation,as illustra

106、ted in the first report of this seriesCurrent EU sub-programmes and calls for proposal are too numerous and hard to navigateStartup journeys are trackable and produce promising outcomesThe last three EU framework programmes have backed over 13,600 startups to dateThese startups received 12B in fundi

107、ng from EU and have raised an additional 70B in private VC.They are already worth a combined 520BThe majority of these startups are still at early stage,and will need additional funding in order to scaleEU programmes have been laying the groundwork for the Deep Tech waveEU support has bolstered stra

108、tegic and frontier technologies such as climate tech,space,biotech,AI,and roboticsThese segments have been traditionally hard to fund.The EU has been ahead of the curve thus driving innovative capacity and laying the groundwork for the Deep Tech waveThese startups also have a higher graduation rates

109、 when EU-backedPage/44 Organisational designEscape velocityHow to attract the best entrepreneurs?How to give them the best experience and not slow down their momentum?Our recommendations to the European Commission are organised across three areas,each with different questionsProgramme constructionAp

110、plication processMobilising private capital-We propose doubling the budget of the Framework programme(in line with the Draghi report)-A large share of the additional funding should be allocated to startups due to their proven measurable economic impact.-EIC has created a good model for the future.ne

111、ed a set of dedicated EU startup institutions-One-stop shop for grants,equity finance and mentorship-More collaboration between Science and Startup funding to improve research commercialization and spinout creationStreamline application process and payout schedulesCurrently startup support programme

112、s are fragmented and hard to navigateSimplify naming,unify portalsOne stop shop approach(single organisation for startups)Give startups room to pivot after initial fundingAccomplishment of organisations such as the EIC are still not fully understood acknowledged by private investorsMore needs to be

113、done to promote EU backed startups to private investors:-Demo days with top-tier investors(by stage)-Demo days with corporates(procurement)Include angels and early stage VCs during grant stagesEU to take investment lead in follow up rounds currently a startup goes through the EIC and then they need

114、to fend for themselves on the private capital market.EU could be more involved with follow up investments/facilitate these.Financial allocationWhat should be the building blocks of the next Framework Programme?How to allocate resource between them?Application processDesign industrial,competition,and

115、 trade policies to focus on sectors,foster innovation,ensure fair competition,and adapt to strategic needs.Escape velocityInvestment to rise by 5%of GDP,to levels last seen in the 1960s and 70s,amounting to 800 billion/yearOrganisational designDesign industrial,competition,and trade policies to focu

116、s on sectors,foster innovation,ensure fair competition,and adapt to strategic needs.#1 Financial AllocationWhat should be the building blocks of the next Framework Programme?How to allocate resource between them?#2 Organisational DesignWhat high-level organisational structure would best support true

117、 entrepreneurs?How to attract the best entrepreneurs?How to give them the best experience and not slow down their momentum?#3 Building MomentumHow to maximize chances of success for startups after they have received support?How to activate private investment?How to engage the best VCs?Source:Dealroo

118、m.coPage/45 Financial Allocation Recommendation#1Startups should get a higher share of future Framework ProgrammesExcellent Science(25 billion):Funds frontier research(ERC,16 billion),researcher mobility and training(Marie Skodowska-Curie Actions,6.6 billion),and research infrastructure(2.4 billion)

119、to boost EU scientific excellence.Global Challenges and Industrial Competitiveness(53.5 billion):Supports large collaborative projects across six thematic areas(health,digital,climate,food,etc.)and funds EU Missions addressing societal challenges like cancer,smart cities,and climate action.Innovativ

120、e Europe(13.6 billion):Focuses on disruptive innovation and scaling startups through the European Innovation Council(EIC,10.1 billion)with grants,equity investments(EIC Fund),and a one-stop-shop for innovators.There is also a horizontal program(3.4 billion)to support less-developed regions in buildi

121、ng research and innovation capacity.ScienceGlobal Challenges and Industrial CompetitivenessSMEs and StartupsFP 9The Draghi report*proposes doubling the budget of the Framework programme,which would create room for more startup support.A large share of the additional funding should be allocated to st

122、artups due to their proven,measurable economic impact.To ensure this,the European Commission should work towards defining a dedicated startup category within the next Framework Programme,alongside the existing SME classification.More collaboration between Science and Startup funding is needed to imp

123、rove research commercialization and spinout creation.Providing more of the budget through loans or equity would enable the EU to grow its funding programs over time.FP 1095 billionStartups&scaleups fundingOne-stop-shop approach Organisation(s)geared around startups&scaleupsSupport for breakthrough s

124、cience and spin-outsGlobal Challenges and Industrial CompetitivenessFewer,Bigger Projects?Redesigned EU Framework Program(20282035)Goal:Make Europe a global leader in science,innovation,and tech breakthroughs by doubling the budget and cutting red tape.1.Three Key Pillars:Big Challenges(1 trillion):

125、Fund ambitious“moonshot”projects in health,climate,digital,energy,and defense.Inspiration:DARPAs bold,high-risk projects.Examples:Carbon-negative cities,AI-driven healthcare,quantum internet.Scaling Innovation(700 billion):Help startups and scale-ups grow with more venture-style funding(grants+equit

126、y).Inspiration:Y Combinator-like accelerators and the EIC Fund.Examples:Super hubs for green energy,Europes own AI ecosystem.Talent&Research(300 billion):Attract and keep the worlds top talent with fellowships,training,and research support.Inspiration:Prestigious fellowships like Rhodes Scholars+mor

127、e funding for blue-sky research.Examples:Grants for early-career scientists,mobility Programmes for researchers.2.Key Upgrades:Faster Decisions:Cut bureaucracyfunding approvals in 6 months instead of 18+.Fewer,Bigger Projects:Focus on fewer,high-impact projects rather than spreading funds too thin.P

128、ublic-Private Partnerships:Boost private investment with EU-backed guarantees.3.Big New Initiatives:Green Energy Leadership:Invest in fusion,hydrogen,and carbon capture.AI&Quantum Power:Build Europes AI and quantum computing hubs.Cure the Incurable:Fund cutting-edge biotech to tackle diseases like A

129、lzheimers and cancer.In Summary:This streamlined framework focuses on big bets,scaling innovation,and talent development to make Europe the place where breakthroughs happen.Streamlined application process Funding approvals in 6 months instead of 18+.“Double the size of next Framework Programme”“Drag

130、hi:Design a simpler and more impactful tenth EU R&I Framework Programme:refocus the next Framework Programme(FP10)on selected priorities(new EU Competitiveness Priorities)and increase the budget to EUR 200 billion.More collaboration between Science and Startup funding to improve research commerciali

131、zation and spinout creationTotal size for 7 years periodSource:Dealroom.co,*M.Draghi The future of European competitiveness(2024)ScienceGlobal Challenges and Industrial CompetitivenessSMEs and StartupsFP 9FP 1095 billionStartups&scaleups fundingOne-stop-shop approach Organisation(s)geared around sta

132、rtups&scaleupsSupport for breakthrough science and spin-outsGlobal Challenges and Industrial Competitiveness“Double the size of next Framework Programme”Page/46 Organisational Design Recommendation#2Provide a simple application process for startupsSlide#43Instead of recommending a new organisation I

133、 think it more realistic(event palatable!)to build on(or within)what is already in place.So more of an emphasis on:*Provide a single pathway in for startups*recruit experts(from VC world?)or thematic experts(ref.what EIC is doing its team of Programme Managers-https:/eic.ec.europa.eu/eic-communities

134、/eic-programme-managers_en*Enhanced KPIs(focused on post-EU funding success-raising investment,EV,employees,etcSource:Dealroom.coOrganisational Design Recommendation#2Provide a simple application process for startupsHave a single point of entryProvide startups with centralized access to EU programme

135、s,simplifying exploration and application processesLeverage expert-led reamsRecruit venture capital professionals and thematic experts to guide investment decisionsEnsure post-funding successActively support startups in scaling,securing follow-on investments,and achieving market successEnable commer

136、cialisationEnsure that grant funded university projects do not get prohibitive equity demands from Technology Transfer Offices by establishing a spin off option within the grant agreementStreamline OperationsReduced complexity and faster approvals,rolling submissions instead of fixed deadlines,reduc

137、ing initial review to 2-4 weeks.Leverage lead investor due diligence.EXTRA CONTENTALIGN HERE EXTRA CONTENT/SOURCES/INSPIRATIONOne critical aspect is the length of time it takes to approve grants/equity and the well-known bureaucracy.Therefore,the processes should be geared towards shorter and faster

138、 approval and decision making,as time is money for start-ups and waiting for disbursement can slow down the execution capacity and growth of start-ups.Jan Engels,Investment Manager High-Tech GrnderfondsThe funding application is daunting,of course.It is long and requires substantially more effort th

139、an other funding schemes to which we have applied.The challenge is to able to invest the effort given the relatively low probability of success.Felix Winterstein,CEO Xelera Technologies(EIC Company)We applied twice before we eventually got approved.It was a long,extensive,and extremely demanding pro

140、cess to apply.Jon Linden,CMO Ekkono(EIC Company)”Interviews with market participants confirm that the application processes are an opportunity for improvement“”“”Page/48 Building Momentum Recommendation#3.1Ensure EU-backed startups have enough risk capital available to bring their innovations to mar

141、ketEU-backed startups have a different go-to-market journey from research to commercialisation,which is not well understood or compatible with many European VC funds.These startups already have higher graduation rates through the startup journey than their open market counterparts but still too many

142、 projects are deemed too risky for finding lead investors.The EIC Fund is a good public initiative to provide more VC funding to early-stage Deep Tech startups but its aversion to lead investment rounds leaves many startups unfunded.There should be more private VC funds that understand the European

143、grant pipeline and lead rounds,to provide much needed follow-up funding to EU-backed innovation.The EIF could be mobilised to invest in VC funds that focus on EU-backed frontier tech.There are already some funds such as Ventures.eu which are specifically focused on EU-backed founders and aim to supp

144、ort them to bring their innovations to market and we encourage to see more of them.Slide#47Is it not a missed opportunity to not mention the graduation curve here(or somewhere in the recommendations).How about embed it in the recommendation to investors(bigger emphasis on investor in the physical te

145、ch space given the graduation curve?)Source:Dealroom.coPage/49 1.Community-building efforts:While initiatives like the EU Startups Summit and the EIC community platform offer a solid foundation,they should be expanded.EU-backed startups need more ways to promote themselves and connect with investors

146、 through larger startup summits,pitch competitions,and targeted demo days with top-tier investors and corporates.2.Data discovery:Access to data on EU-backed startups should be scaled through tools like Innovation Radar and Dealflow,enabling in-depth search and filtering to identify high-potential s

147、tartups across all FP10 pillars.Policymakers at EU and Member State levels should use such quasi real-time insights to support informed decision-making.3.Amplify EU-backed startups success stories:This report is a first step,but more efforts are needed to consistently showcase how EU backed startups

148、 tackle critical trends.As highlighted by ESNA*,regularly publishing researchand promoting it through both mainstream and specialized mediais crucial for strengthening Europes innovation brand.Building Momentum Recommendation#3.2Strengthen the visibility and impact of EU-backed startupsDesign WIPSou

149、rce:Dealroom.co*ESNA,EU Startup Ecosystem:Driving change,past,present and future(2024)3.Unify European ID Branding to identify the EU startup ecosystem Publishing studies highlighting European startup success:Regularly publish comprehensive studies and cases focused on how European startups are addr

150、essing critical trends and areas(such as the ones mentioned in this chapter as well as chapter 1)and how this could validate Europes possibilities to compete in global leagues.Following these actions,publishing case studies and highlighting specific cases of success can become a communicational supp

151、ort for the creation of a strong European brand(another point highlighted by ESNA Members as well as Advisory Board as mentioned in Chapter 4),by showcasing data and success stories,reinforcing the EUs position in the global innovation landscape.Boosting media coverage of startup ecosystems:Promote

152、the creation of niche media outlets,following the cases of other nations of the world,where startup content is a daily highlight on major media outlets and opinion leaders formal messages.To be open to focus on the European startup scene with cases and facts,may provide a support for the diverse sta

153、keholders of the startup ecosystem of Europe,such as success stories,best practices,and critical data such as investment deals.Select main critical industries that are part of the EU vision(e.g.:DeepTech,Artificial Intelligence,ClimaTech).Furthermore,to raise awareness and visibility of the EU start

154、up ecosystem;also contributes to the previous actions highlighted here as:entrepreneurial thinking(mindset).Finally,boosting media coverage of startup ecosystems may also become a support for another objective which was also mentioned by ESNA Members as well as the Advisory Board,promoting a unified

155、 European identitySaveGet introducedEU-backed startupsSeize the opportunity and invest in EU-backed startupsFind the best EU-backed startupsConduct in-depth company analysisGet directly introduced to foundersJoin the networkEU-backed startupsScale your vision with EU supportBoost your visibility and

156、 get introduced to investors and corporatesUse EU-backing as credibility boostNetwork strategically and find the best eventsClaim your profile30M Series B round to scale-up production and grow the team further.Page/52 1 How the EU Commission funds innovation2 Tracking EU-backed startups3 Conclusions

157、&recommendationsAppendix:MethodologyPage/52 Page/53 Massive funding gap with US,especially at the critical breakout and lae stages In fact,85%of the$30bn funding gap in 2023 between New Palo Alto and the Bay Area is at the critical scale up stageSource:Dealroom.coMethodologyWhat are startups?Startup

158、s are companies designed to grow fast.Generally,such companies are VC-investable businesses.Only companies founded since 1990 are included in this report.What is a unicorn?Unicorns are(former)startups that reached US$1B valuation or exit at one point in time.What is a Unicorn?What is a thoroughbred?

159、Companies can also be divided by revenue rather than valuation.Thoroughbreds are companies generating$100M+in annual revenue,Colts those generating$25-100M in annual revenue.Underlying DataDealrooms proprietary database and software aggregate data from multiple sources:harvesting public information,

160、user-submitted data verified by Dealroom,data engineering.All data is verified and curated with an extensive manual process.Data fro this report was taken in November 2024.The data on which this report builds is available via app.dealroom.co.For more info please visit dealroom.co or contact supportd

161、ealroom.co.Venture Capital,InvestorsInvestment are referred to by their round labels such as Seed,Series A,B,C,late stage,and growth equity.VC investments exclude debt,non-equity funding,lending capital and grants.When assessing the VC investment raised by an EU-backed startup,we include both the fu

162、nding secured prior to receiving EU support and the follow-on investment obtained afterward.Regional scopeThis report focuses on EU-backed startups headquartered or founded in Europe and Israel.Some EU-backed companies founded in Europe and Israel relocate beyond their borders,most maintain business

163、-critical ties to their homelands.In order to take this reality into account,this report includes both Europe-based startups,which maintain their main center of business(HQ)in their country of origin,and Europe-founded startups,which relocated their HQ outside of the region.Industries,SegmentsDealro

164、oms Intelligence Unit has developed a proprietary technology taxonomy that acts as a foundation and helps navigate existing and emerging technologies.Dealrooms proprietary taxonomyPage/54 Massive funding gap with US,especially at the critical breakout and lae stages In fact,85%of the$30bn funding ga

165、p in 2023 between New Palo Alto and the Bay Area is at the critical scale up stageSource:Dealroom.coMethodologyWhat is a Deep tech startup?Deep Tech includes startups working on innovative technologies that are closely linked to the frontiers of science and engineering.These companies inherently tak

166、e on risk relating to the feasibility of their technologies(R&D risk),as well as the risk in proving market demand for the product which has likely not been seen before in the market(Product/Market fit risk).Deep Tech startups often start with an extended R&D phase,have a higher share of technical s

167、taff and involve hardware and/or IP.The European Deep Tech Report 2023What is a Climate tech startup?Climate tech includes startups working on innovative technologies solutions designed to address climate change and its environmental effects.This can be done by reducing GHG emissions or adapting our

168、 systems to environmental changes.Within the broad spectrum of climate tech,we find different types of technology,such as hardware,software,API,IoT,and biotech.Climate applications span a wide set of industries and sectors.Climate tech guideWhat is an AI startup?We define a company as“AI-first”if it

169、:1)develops computing infrastructure focused on AI,such as Ai chips and processors or specialized cloud providers for AI2)develops AI models for other companies,such as generative AI foundational models3)develops machine learning operations tools to:prepare,annotate or generate data for AI;to train

170、and optimize/fine-tune AI models;to deploy and monitor AI performances.4)offer products and services which have artificial intelligence as their core feature.The European AI report 2024Page/55 Main authorsMassive funding gap with US,especially at the critical breakout and lae stages In fact,85%of th

171、e$30bn funding gap in 2023 between New Palo Alto and the Bay Area is at the critical scale up stageThijs PovelFounder of Dealflow.eu and Ventures.euFelix UllmerResearch SpecialistYoram WijngaardeFounder and CEONina ChaloumEcosystems Research LeadVittorio SambuyVertical Leader&Platform expertBy the E

172、uropean Commission,Directorate-General ofCommunications Networks,Content&Technology.The information and views set out in this publication are those of the author(s)and do not necessarily reflect the official opinion of the Commission.The Commission does not guarantee the accuracy of the data included in this Preparatory Action.Neither the Commission nor any person acting on the Commissions behalf may be held responsible for the use which may be made of the information contained therein.2024 European Union.All rights reserved.Certain parts are licensed under conditions to the EU.Disclaimer