The European Commission has announced plans to establish a public-private fund of at least €10 billion ($11.3 billion) to support tech startups in scaling up, in a strategic push to close the innovation gap between the European Union and global leaders like the United States and China.
The initiative, titled “Choose Europe to start and scale,” was launched on Wednesday as part of broader efforts to increase the number of unicorns — startups valued at over $1 billion — across the 27-nation bloc.
A key focus of the strategy is addressing the structural hurdles that hinder the growth of European startups, including fragmented regulations, limited access to finance, and insufficient venture capital investment. While early-stage funding in Europe is scarce, later-stage financing is heavily dominated by U.S. investors, whose capital contributions are currently seven times greater than those in Europe. The Commission highlighted that these gaps make it difficult for innovative firms in Europe to expand or go public.
As part of the initiative, the EU plans to launch the “Scaleup Europe Fund” in 2025, which will consist of both public and private funding components. The fund will be managed by a private investment manager and will take equity stakes in promising startups. Though the final size of the fund is yet to be confirmed, EU officials indicated it would amount to a “double-digit” billion-euro figure, with the majority of contributions expected from private investors. The Commission emphasized the need for the fund to be impactful, rather than symbolic.
The broader strategy also includes proposals to ease regulatory burdens for high-tech startups, encourage their inclusion in public procurement processes, and streamline immigration procedures for non-EU startup founders. Additionally, the Commission reiterated its commitment to redirecting private savings into business investments through its Savings and Investments Union, which seeks to bolster the EU’s underdeveloped private pension sector and enhance capital market integration.