EIC STEP Scale-up: bigger equity cheques to push strategic European deep tech toward large rounds

On 26 November 2024 the European Innovation Council and its executive agency opened the EIC STEP Scale-up call. The scheme is part of the Strategic Technologies for Europe Platform or STEP and aims to close a perceived funding gap for deep tech companies by providing equity only investments of between €10 million and €30 million per company. The facility has an indicative budget of €300 million for 2025 and is projected to grow to €900 million for the period 2025 to 2027 subject to budgetary approvals.

What the STEP Scale-up call offers

The STEP Scale-up call channels capital through the EIC Fund with the explicit objective of leveraging private co-investment. The programme is aimed at companies that need large follow-on rounds to scale manufacturing or commercialisation of strategic technologies. Beyond capital, successful applications that meet evaluation thresholds receive a STEP Seal and access to EIC Business Acceleration Services designed to connect awardees to coaches, investors, corporates and public buyers.

Who can apply and key eligibility rules

Eligible applicants are single companies classified as SMEs or small mid-caps established in an EU Member State or a Horizon Europe Associated Country. An investor may submit a proposal on behalf of an eligible company if there is a prior agreement. The call is targeted at companies preparing major funding rounds. Applicants must demonstrate initial market interest with a pre-commitment from a qualified investor representing at least 20 percent of the target funding round.

Sectors and scope

STEP targets strategic technologies that are considered critical for the EU. The call emphasises three broad groups: digital and deep tech such as semiconductors, quantum and AI; clean and resource efficient technologies including net-zero solutions and advanced materials; and biotechnologies including critical medicines and biomanufacturing. The STEP Regulation and Commission guidance set out how criticality is assessed, for example whether the technology reduces strategic dependencies or brings a cutting edge product to the internal market.

How the money is delivered and managed

Investments are equity only and will be implemented by the EIC Fund which acts as the investment vehicle. The EIC Fund works with investment advisers and partners including the European Investment Bank. Specific due diligence and valuation services may be provided by external contractors such as Alter Domus for KYC and paymaster functions and Dealflow.eu for investor outreach and pitch support. The EIC Fund's Investment Guidelines govern the commercial terms and any safeguards.

Economic security and ownership safeguards

The call includes economic security safeguards. Recipients of investment must not be directly or indirectly controlled by a non-associated third country or by entities established in such countries. The EIC may require additional ownership and control documentation and may include contract clauses to protect European strategic interests. These rules are intended to prevent strategic assets from shifting outside the EU but they can complicate cross-border financing and deter some investors.

STEP Seal and Business Acceleration Services

All proposals that meet evaluation thresholds receive a STEP Seal even if they are not funded by EIC. The Seal serves as a label of excellence intended to facilitate access to other EU funding streams and investor networks. Seal holders also gain access to EIC Business Acceleration Services or BAS which include coaching, investor readiness, procurement matchmaking and international expansion support.

Application process and timeline

Applications are submitted via the EU Funding & Tenders Portal. Submissions are accepted at any time and are batched roughly every three months for evaluation. After batching, admissible applications may be invited to an online jury interview approximately six weeks after the last batching. The jury is composed of up to six members and results are communicated around two weeks after the interview week.

Evaluation and what happens after selection

If evaluated positively the company will enter grant agreement preparation and negotiation of the investment agreement for the equity component. For investments the EIC Fund will carry out due diligence and negotiate commercial terms. The EIC may also seek a suitable investment partner to co-invest alongside the EIC Fund. Successful applicants receive access to BAS and the STEP Seal.

Who runs STEP and who else is involved

STEP is a Commission initiative coordinated with Member States. The EIC Fund is the primary vehicle for the STEP Scale-up investments. The European Innovation Council and SMEs Executive Agency or EISMEA manages EIC programmes operationally. The European Investment Bank acts as an adviser and due diligence partner. Contractors and service providers named in documentation include Alter Domus for KYC and paymaster roles and Dealflow.eu for investor outreach. The Trusted Investor Network and other investor partners are active in co-investment efforts.

Context and critical perspective

The STEP Scale-up call is a policy response to persistent concerns about Europe’s ability to finance capital intensive deep tech scaling compared with the United States and Asia. By offering larger equity cheques and a quality label the Commission aims to lower barriers to securing big rounds. However the scheme faces practical challenges. Public equity can catalyse private capital but it does not guarantee follow on investment. The requirement to limit control by non-associated third countries and to preserve value in the EU may reduce the pool of willing co-investors and complicate typical venture structures. The projected growth from €300 million to €900 million depends on future budgetary decisions. Finally the STEP Seal is a reputational asset but it does not convert automatically into private capital or market traction.

Practical next steps for applicants

Companies that meet the tech scope and legal eligibility can prepare and submit via the Funding & Tenders Portal. They should secure a qualified investor pre-commitment covering at least 20 percent of the targeted round, prepare a concise freedom to operate note if a full FTO is not available, assemble a business plan and pitch deck and engage with National Contact Points and EIC Business Acceleration Services for coaching ahead of submission.

Contacts and where to follow developments

Applications are submitted via the EU Funding & Tenders Portal. Operational queries can be directed to EISMEA helpdesks and National Contact Points. The EIC and STEP platforms publish updates, lists of STEP Seal projects and investor materials. Given that budgets for 2026 and 2027 remain subject to adoption, stakeholders should monitor the EIC work programmes and STEP announcements for updates.

Bottom line

The EIC STEP Scale-up call is an important attempt by the EU to use public equity to shore up strategic technology scale-ups and to signal policy intent on economic security. It offers substantial tickets for companies that can marshal investor pre-commitments and meet the strategic scope. But its ultimate impact will depend on the willingness of private capital to co-invest under the EIC’s commercial and security constraints, and on the practical outcomes of negotiations under the EIC Fund's investment framework.