EU’s $5bn Scaleup Europe Fund to begin backing companies

The European Commission has announced the launch of a €5 billion Scaleup Europe Fund to support deep-tech businesses within the European Union. This significant funding mechanism aims to help the region catch up with the US and China in terms of technological innovation. The EU's investment into the fund is backed by Horizon Europe, the world's largest research and development programme, which has allocated over €90 billion in funding until 2027.

The Scaleup Europe Fund, initially announced in October 2025, is designed to build on the 'choose Europe to start and scale' strategy and will direct growth capital at high-potential companies across strategic sectors such as artificial intelligence, quantum computing, clean energy, space technology, biotech, and medical innovation.

The fund is expected to raise a total of €25 billion and is being managed by EQT, a Stockholm-headquartered investment firm. Recent reports suggest that the fund will back companies like The Exploration Company, a Bavarian space-tech firm, and Mistral AI, a Paris-based AI startup. The fund's launch comes as EU-based companies face significant challenges in accessing the necessary capital for growth from within the bloc, often leading them to seek funding elsewhere or relocate their bases outside Europe.