EU to Acquire Shares in Start-Up Companies for the First Time
- January 7, 2021
- Posted by: Quatro Strategies
- Category: Internet Technology
The European Union will become a shareholder in startups for the first time through one of its biggest investment funds. The European Innovation Council Fund, the size of which is expected to be around 3 billion euros, will be an important fund for breakthrough technologies to better compete with the U.S. and Asia.
The fund will include grants and equity stakes to finance start-up companies in “deep tech”, such as health, sustainability and advanced manufacturing. Ownership will vary between 10% and 25%, and ticket sizes can be as much as 15 million euros.
EU officials think the funding will reduce the risk for the investments and attract other investors by the direct financing of breakthrough companies.
The EU currently invests into tech companies via grants from the European Commission and the European Investment Fund, through venture capital firms. The new move will allow EU to bypass venture capital firms to boost early stage firms.
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