Finance
EU plans tech scale-up fund to narrow gap with US, China
Published by Global Banking & Finance Review®
Posted on May 28, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 28, 2025
2 min readLast updated: January 23, 2026
The EU plans a €10 billion fund to help tech companies scale up, aiming to close the innovation gap with the US and China.
By Philip Blenkinsop
BRUSSELS (Reuters) -The European Commission plans to create a public-private fund of at least 10 billion euros ($11.3 billion) to help tech companies scale up as the European Union aims to narrow its innovation gap with the United States and China.
Launched on Wednesday, the Commission's "Choose Europe to start and scale" strategy is designed to make up for the EU's shortfall in unicorn companies - startups with a value that has risen above $1 billion.
The EU executive outlined key challenges limiting startups' growth to scale including fragmented regulation across the 27-nation bloc and access to finance, markets, talent and infrastructure.
Europe has a shortage of venture capital willing to bet on early initiatives, while for later-stage financing, as companies expand their markets and potential prepare for a stock market listing, U.S. funding is seven times bigger.
The Commission said it would create a "Scaleup Europe Fund" next year, with a public component and around four times more private money. The fund would take stakes in promising companies and be run by a private investment manager.
The precise size is still to be determined, but an EU official said it would be a double-digit billion-euro amount.
"We don't want it to be a drop in the water. We want it to make a clear difference," the official said.
EU consumers hold much of their money in banks, whose capital is some 300% of GDP, against 85% for U.S. counterparts.
The EU already has plans to steer private savings to investments in business through its Savings and Investments Union, which aims to develop a more expansive private pension industry across the region.
The Commission's strategy includes proposals to create simpler rules with reduced administrative burdens for high-tech startups, boost participation in public procurement and to fast-track entry for non-EU startup founders. ($1 = 0.8827 euros)
(Reporting by Philip Blenkinsop;Editing by Helen Popper)
The EU plans to create a public-private fund of at least 10 billion euros to help tech companies scale up and address the shortfall in unicorn companies.
Startups in Europe face challenges such as fragmented regulation, limited access to finance, and a shortage of venture capital for early initiatives.
The Scaleup Europe Fund will have a public component and is expected to attract around four times more private investment, focusing on promising companies.
The Savings and Investments Union aims to channel private savings into business investments and develop a more expansive private pension industry across the region.
The Commission announced that the Scaleup Europe Fund is set to be created next year, with its precise size still to be determined.
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