European Institutional Investors Pact aims to boost bloc’s tech startups

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The scheme, cocreated by the European Commission and the European Investment Bank (EIB) Group, aims to direct more institutional investment into European innovation

Thirteen institutional investors have expressed their intent to invest in large EU-based funds focussed on tech start-ups and scale-ups, following the introduction of the European Institutional Investors Pact (EIIP).

The EIIP is a voluntary framework led by the European Commission and the EIB Group aiming to reduce barriers to investment in the bloc’s innovation ecosystem.

This will include the Commission leading a Policy Dialogue Forum to discuss regulatory and investment policies with institutional investors, with the EIB Group launching an investment platform to help investors access relevant investment opportunities.

“Our goal is clear: to provide Europe’s institutional investors with a single, credible entry point into innovation financing. In today’s world, this partnership between EU institutions and the private sector sends a powerful message of European unity, ambition and determination,” said Nadia Calviño, President of the EIB Group.

The initiative is part of the EU’s Startup and Scaleup Strategy, a programme designed to eliminate barriers to innovation and align incentives for tech start-ups.

The Strategy is centred around 26 strategic actions focussing on simplifying regulations, improving access to funding, accelerating market uptake, attracting talent, and access to supporting infrastructure. To date, 10 actions have been fully delivered, with ‘most’ expected to be delivered by the end of this year.

“Talent, ideas and ambition – Europe has all of these. Now we are making sure our innovative companies can grow, scale and lead on the global stage – from Europe,” said President of the European Commission, Ursula von der Leyen. “By bringing together public and private partners, the goal is to unlock long-term capital for our technology. This is about turning European innovation into European industrial and economic strength.”

The 13 institutional investors ready to join the EIIP will invest via existing EU-based funds, including the European Tech Champions Initiative 2.0, the Scaleup Europe Fund, and others supported under InvestEU.

The formation of the EIIP comes at a time when Europe is struggling to develop a technological foundation from which to compete with China and the USA. While the EU is widely recognised as a hotbed for tech talent, access to funding and inability to scale across the continent means promising businesses often relocate abroad.

Europe will be hoping that deeper institutional investment can turn its local talent into globally competitive companies that not only scale and stay in the bloc but also reduce reliance on tech giants abroad.

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