What the announcement says

On 14 October 2021 the European Commission's European Innovation Council announced that 65 start ups and small and medium sized enterprises have been selected for funding under the newly established EIC Accelerator. The Commission said the package amounts to a combined €363 million in grant and equity support. This is presented as the first cohort funded under the fully fledged EIC Accelerator launched under Horizon Europe.

Key figures and immediate detail

The press release provides a headline total of €363 million for the 65 beneficiaries. It reports that 60 out of the 65 awardees opted to receive equity through the EIC Fund, and that about €227 million of the €363 million is therefore expected to be delivered as an investment component. The companies are established across 16 countries.

How the EIC Accelerator works in practice

The EIC Accelerator is intended to support start ups and SMEs developing high risk, high reward deep tech innovations that may create or disrupt markets. The instrument mixes non repayable grants for innovation activities typically at technology readiness levels 6 to 8 together with equity or quasi equity investments managed through the EIC Fund. In addition to finance recipients receive business acceleration services including coaching, mentoring, and access to investors and corporate partners.

Background and context

The EIC grew out of an earlier pilot (2018 to 2020). The Commission launched the fully fledged EIC under Horizon Europe in March 2021. The Commission described the EIC as 'one of the largest deep tech investors in Europe' with a multi year funding envelope. The press announcement points to a broader EIC budget in the region of over €10 billion for the programme overall and states that approximately €1.1 billion was available for the Accelerator in 2021. Certain budgets were earmarked for strategic priorities such as health, digital technologies and the Green Deal.

Earlier in 2021 the EIC pilot made two rounds of direct equity investments and the release notes that 111 highly innovative companies received more than €500 million in that pilot phase. The press release also said the EIC pilot had supported some companies that later reached 'unicorn' valuations.

Numbers submitted and how the new process ran in 2021

Under the new continuous submission process introduced with Horizon Europe, applicants can submit short proposals at any time and then proceed to full applications at periodic cut off dates. The Commission reported that since March 2021 more than 4,000 start ups and SMEs had submitted short proposals. The first full application cut off on 16 June 2021 received 801 full proposals. A second cut off on 6 October 2021 took 1,098 further full proposals which were under assessment at the time of the announcement. The Commission said the results of that second batch would be published by the end of 2021 and that the next cut off was expected in early 2022.

Questions and caveats worth noting

The announcement is notable for scope and intent but it also raises routine questions that merit scrutiny when reading EIC and other public innovation announcements. Equity figures cited in press copy are described as 'expected' or 'up to' amounts and remain contingent on later due diligence, negotiation and the availability of the EIC Fund to commit. An award announcement that bundles grant and investment figures risks overstating immediate cash flows. The reported €227 million expected as investment will be subject to investment committee decisions, valuation outcomes, and co investor commitments in many cases.

High demand for equity is an important signal that European deep tech founders are seeking patient capital. That said the EIC Fund model typically aims to crowd in private capital and the full real world impact depends on whether the public equity stake leverages additional private investment and how the selected companies scale over the following years.

Technical concepts explained

Why this matters for Europe’s innovation ecosystem

The EIC represents a strategic attempt by the EU to supply more late stage public capital and expertise for deep tech. Europe has historically lagged the United States in late stage venture capital for hardware and capital intensive deep tech. By combining grants with an equity vehicle the EIC aims both to derisk breakthrough projects and to attract private co investors. That approach can work when public investment is catalytic and when selection, valuation and follow up are disciplined.

However the policy risk is twofold. First there is the risk that headline figures are read as cash in hand to founders rather than staged commitments that depend on due diligence. Second public investors need strong governance to avoid crowding out experienced private investors or creating perverse incentives through inconsistent valuation expectations.

What to watch next

Follow up items that will be important to track include: whether the EIC Fund completes the equity checks and signs investment agreements for the companies that requested investment, the amount of private co investment mobilised per euro of EIC funding, the geographic distribution of funded companies beyond the headline '16 countries' figure and whether awards concentrate in a few innovation hubs, and longitudinal outcomes such as subsequent external fundraising, scaling, revenues, jobs and exits.

Transparency on the final split between grant and equity, and timely reporting on follow through will determine whether the EIC achieves its ambition to move Europe up the value chain in deep tech.

Practical notes for applicants and observers

If you are an applicant, note the staged process with short proposal, full proposal and jury interview. Successful short proposals gain access to free coaching for the full application. If you are an investor or policy watcher, ask to see the EIC Fund due diligence outcomes and independent assessments of leverage. For journalists the key verification points are final investment agreements signed, money disbursed and subsequent performance indicators.