The European Commission is planning to make available a budget of €300 million for the European Innovation Council pilot to help it start investing in small businesses. Commission sources said they hope to have the investment vehicle up and running in the autumn of 2019, because the EIC will start accepting applications for ‘blended finance’ – a mix of grants, loans, and equity – in June, and will begin assessing them in September. This will be the first time in EU R&D funding history that equity investment will be offered alongside more traditional forms of grant and debt financing for small tech companies. The €300 million extra budget for the pilot programme will bring total funding this year and next to more than €2 billion.
The idea of the EIC is to allow small and medium sized enterprises (SMEs) to get larger investments faster and more easily than at present from EU programmes. The Commission is promising it will be a “one-stop-shop” for tech companies, and will operate much like a venture capital firm. The SMEs won’t have to wait for a relevant call for proposals; instead, applicants define the scope of the project themselves.
The initiative to form a European Innovation Council aims to create more world-scale tech companies in Europe with a budget that will eventually exceed €1.5 billion a year. It aims to seed “disruptive” innovations – in virtual reality, self-driving cars, new materials and other fields that can make Europe more competitive. The EIC is one of the contested areas of the forthcoming Horizon Europe research programme, the successor to Horizon 2020. The Commission wants the EIC to help businesses scale-up on a total budget of €10.5 billion from 2021 to 2027. However, some members of the European Parliament want to reserve a chunk of EIC resources just for grants rather than equity, and think the EIC is getting too large a share of the Horizon Europe budget.