Startup, the European super fund to protect unicorns from the sights of China and the United States

L’European Union she mobilized to protect hers unicornsas they are defined startups that have reached a valuation of 1 billion euros, and prevent them from being financed by foreign investors, the United States and China in primis. To do this, it financed a new investment fund with an initial endowment of 3.75 billion euroswhich will be increased over the years.

European tech startups often lack sufficient capital to compete on a global scale and approx three quarters of these companies are forced to move abroad, being bought by US and Chinese funds. The new initiative called Champions of European technology (Etci), wants to bridge this gap to stimulate their growth, keep unicorns on the old continent and create new jobs.

Etci – cornerstone of the Pan-European Initiative Scale Uppresented in February 2022 in Paris at a summit organized under the French presidency of the Council of the European Union – will pool the resources of some participating member states and the European Investment Bank (Bei) to significantly intervene in the large-scale venture capital fundswhich in turn will provide funding for growth to European technology champions.

The initiative will be managed by European Investment Fund and got 1 billion euros each from Spain, France and Germany, 150 million euros from Italy and 100 million from Belgium. In addition, the EIB has allocated another 500 million euros to reach the total of 3.75 billion.

“It is a virtuous and significant example of what we can achieve collectively to strengthen the economic and industrial sovereignty of the European Union – has said Bruno Le Maire, French Minister of Economy, Finance and Industrial and Digital Sovereignty -. Thanks to this initiative, European technology companies will be able to further contribute to innovation, growth and job creation and thus to the feconomic, social and environmental turus of the Union“.

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The so-called “fund of funds”

The Etci it will not directly finance the scale upsbut will act to increase the financial capacity of already existing large-scale European venture capital funds, not excluding private investment. It will be a sort of fund of funds.

It will then be the same states a decide how to contribute to the fund. To benefit of the interventions will be startups trying to raise investments exceeding 50 million euros. The supported companies will have to comply with certain obligations, in particular that of invest at least the entire amount received within the Union European. Other requirements concern the obligation to allocate at least a part of the funds to European companies, register patents in the Union and have the main and research and development headquarters always in the territory of the Union.