EIC Accelerator implementation update and implications for selected companies

On 13 May 2022 the European Innovation Council published an update explaining delays in the implementation of its Accelerator funding. The programme, relaunched under Horizon Europe in 2021, mixes grants and equity investments to support high risk, high potential start-ups and SMEs. The update confirms that while most grant-only contracts have been or will soon be signed, decisions and investment agreements for blended finance and equity-only deals are delayed because the EIC Fund is being restructured and an external fund manager must be appointed.

What caused the delays

According to the EIC the delays arise from two linked issues. First, the EIC Fund needed to be restructured to align with Horizon Europe rules and to incorporate lessons from a pilot phase. Second, the Commission is negotiating terms with an external fund manager who will operate parts of the EIC Fund. Those negotiations were expected to be completed by 30 June 2022 at the latest. The Commission says it regrets the impact on companies and is working to finalise grant decisions promptly while investment decisions follow after further due diligence.

How decisions and payments will be sequenced

The Commission set out a practical sequence for companies selected for blended finance. Grant decisions and contracts are being prioritised because grants can be contracted and pre-financing disbursed quickly. The equity investment decision by the EIC Fund depends on the outcome of investment due diligence and is expected to occur some weeks or months later. The EIC noted that in urgent cases the Fund could make investment decisions before the external fund manager agreement is completed.

Cut-off by cut-off status and timelines

Scale of support and the Accelerator offer

The EIC Accelerator combines direct grants with equity or quasi-equity investments. Grant support is described as lump sum contributions below €2.5 million for innovation activities typically between TRL 6 and 8. The EIC Fund makes equity investments generally indicated as ranging from €0.5 million to €15 million. The EIC can consider investments above €15 million for technologies of strategic European interest. Awardees also get access to Business Acceleration Services that include coaching, investor introductions and market development support.

What the EIC says will not change

The EIC reaffirmed that the new implementation arrangements will not alter the Fund’s stated risk taking approach. The stated policy intent is to continue supporting high risk innovations that are not yet attractive to private investors at the required scale, to use grants to de-risk projects and to leverage private co-investment via investments from the EIC Fund.

Practical implications for selected companies

Delays in equity decisions are not merely administrative. For start-ups timing affects runway, hiring, partnerships and other investor negotiations. A grant that arrives on time can help with short term liquidity. An equity decision that arrives late can change valuation dynamics and the company’s ability to close additional rounds. The EIC update acknowledges this and signals that grant decisions will be prioritised while investment decisions proceed after due diligence and negotiation with the Fund manager.

What companies should do now

Selected companies should not assume a single timeline. Practical steps include continuing to prepare for due diligence, keeping financial and legal records current, engaging proactively with EIC contract managers, and exploring interim funding options if cashflow is tight. Beneficiaries can also use EIC Business Acceleration Services to find partners and investors, and contact national or regional agencies for bridge support where available.

Broader context and assessment

Building a public equity vehicle inside a research and innovation programme is legally and operationally complex. The need to align the EIC Fund with Horizon Europe rules and to learn from a pilot phase are legitimate reasons for change. Appointing an external fund manager is standard practice in many public venture vehicles, but the negotiation and contracting process can be time consuming and opaque to beneficiaries.

The update reads as an attempt to balance two priorities. One priority is to limit disruption for companies by focusing on grant contracting and pre-financing. The other priority is to establish the investment governance and operational model that the Commission regards as necessary for the long term. From a critical standpoint, these priorities can conflict when timing matters to companies that rely on rapid access to capital.

Risks to watch

The main risks are cashflow stress for awardees, reputational risk for the EIC if timelines slip further, and potential market signalling that may make private co-investors hesitant. There is also the risk that changes to investment management could influence how quickly investments are executed and on what terms. Transparency about timelines and interim measures is important to reduce uncertainty.

Bottom line

The EIC update confirms that grant activity is progressing and that negotiated investment agreements are the remaining bottleneck. The June 30 2022 target for concluding the external fund manager negotiations was framed as the key milestone. Companies should prepare for staged delivery, expect equity decisions to follow grants after due diligence, and consider contingency plans for bridging finance. The policy intent to continue taking significant risks on deep tech is clear, but the implementation timetable will be decisive for companies that need capital on precise schedules.

Key dates and next milestones to follow