The European Investment Bank (EIB) announced on Friday (May 16) that it is launching a new initiative to provide €70B in startup funding by 2027 to close Europe’s investment gap with the United States.
This initiative aims to attract private investors to projects, potentially unlocking up to €250B in investment for the European tech sector.
“This is the largest ever programme to exclusively support European innovation and technological leadership,” EIB Group President Nadia Calviño told Handelsblatt.
The goal, she explained, is to finance research projects and companies “from idea to IPO.”
This also includes supporting the exit of company founders and venture capital investors, who often sell their stakes to US investors, who can afford to buy them.
In the future, the EIB could help EU firms acquire promising startups to prevent technologies from being sold out of Europe.
Launching TechEU platform
Scheduled to launch later this year, the EIB’s TechEU platform will help researchers and companies access financing more easily.
Calviño says that EU support will become “larger, faster and simpler.” The EIB will work closely with the European Commission, and national promotional banks such as Germany’s KfW may also participate.
However, the plan still needs approval from the Bank’s Board of Governors, which includes the finance ministers from all 27 EU Member States.
The EIB Group President gave her perspective to a meeting of the finance ministers in Brussels on Tuesday, and hopes for a positive decision in June.
She also sees a chance to benefit from the uncertainty created by US President Donald Trump’s economic policies.
“The current situation in the United States creates an opportunity for Europe to attract talent, to attract investment, to attract capital,” she said. “We see strong interest in Europe from international investors,” adds Calviño.
To streamline funding for researchers and startups, the new TechEU platform will link various EU funding programs so that each project undergoes a single appraisal.
Strengthening private VC ecosystem
The announcement comes as the US administration has massively cut research funding for institutions such as the elite Harvard and Columbia universities.
Calviño emphasised that Europe is a “beacon of stability, clarity and confidence” in the current geopolitical environment.
“We are not confronted with the same sort of uncertainties that other multilateral development banks are going through,” she says. This enhances the international role of the EIB.
The EIB’s prominent role in venture capital highlights the underdeveloped private capital markets in Europe.
According to Nadia Calviño, the initiative aims to strengthen the private venture capital ecosystem, reducing European startups’ reliance on U.S. funding for growth.
However, critics accuse the EIB of being too conservative in its investment approach.
In his report on EU competitiveness published last year, EU Special Advisor Mario Draghi called on the Bank to take on more risk to foster breakthrough innovation.
EIB to take on more risk and cut red tape
Calviño highlights that the European Investment Bank (EIB) is becoming more open to taking risks, especially with the TechEU program, which will support an additional 1,000 innovators each year.
To do this, the EIB must maintain its AAA credit rating to raise funds cheaply for companies.
Calviño also promises to cut red tape, aiming to return decisions on venture capital financing applications within six months.
Additionally, the EIB is focusing on the defense sector as a strategic priority, funding military projects that can also boost technology.
It currently supports 22 projects in this area, including drone and space companies.
According to Calviño, Europe already has almost everything it needs to close the technology gap with the United States.
“Europe has a very large market, 450 million citizens, excellent universities, excellent research centres and companies, and brilliant startup ecosystems. With deeper and larger capital markets, we can ensure that technologies and startups born in the European Union can be financed and scale up in Europe.”
