- Part of the European Commission’s Capital Markets Union action plan
- Commission to commit an extra €410m, to be matched by private investors
- Set to unlock billions of euros to invest in European innovation
This week’s launch of VentureEU, the European Commission’s venture capital funding programme, is a great step forward for investment in innovation, says Invest Europe.
The association representing European venture capital (VC) has responded to today’s launch by the European Commission and the European Investment Fund (EIF) of six new pan-European VC funds-of-funds. Backed by €410m of fresh EU funding, VentureEU will help attract larger private institutional investors, to boost the venture capital industry and unlock billions of euros of investment capital for innovative start-ups and scale-ups across the continent.
“For the last eight years, Invest Europe has advocated using public money in new ways to bring in more private capital and facilitate the next stage of venture capital’s evolution in Europe,” said Michael Collins, CEO of Invest Europe. “It is a great step forward for investment in European innovation that this is now becoming a reality.”
Announced in 2015, as part of the Commission’s Capital Markets Union action plan, the six funds-of-funds will contribute capital to a selection of VC funds, focused on at least four European countries each. These VC funds will in turn invest in a range of start-ups and SMEs in a range of sectors, including information and communications technology, life sciences and energy. The EU’s investment in VentureEU will be managed by the EIF, under the supervision of the Commission, and rolled out via six experienced private fund managers.
The aim of the programme is to attract global investors — such as pension funds and insurers — who currently find European venture capital funds too small. The average venture capital fund in Europe is around €65 million, but the funds need to be able to raise at least €150 million to attract these large private investors. Between 2010 and 2016, venture capital invested more than €25 billion in European companies.
“It’s great to see the launch of this EU initiative to facilitate more investment by private institutions into European venture capital,” said Nenad Marovac, Invest Europe vice-chair and founder, and managing partner of VC firm DN Capital. “Major global investors will now be able to benefit from the strong returns European VC fund managers are delivering.”
On 1 March 2018, following a review under the Capital Markets Union plan, a revised European Venture Capital Fund (EuVECA) regulation entered into force, making it easier for more fund managers to market under its EU passport. The Commission is also considering a new initiative entitled European Scale-up Action for Risk Capital (ESCALAR) to boost venture capital in Europe and increase its investment capacity.
Invest Europe is the non-profit association representing European private equity and venture capital funds, and their global investors.