Mariya Gabriel

Commissioner for Innovation, Research, Culture, Education and Youth

As Europe emerges from the worst economic crisis in recent times, the role of research and innovation is more important than ever. We face many challenges posed by the COVID pandemic and the transition to a fair, climate neutral, sustainable and digitally enabled economy, the solutions for which will come from novel technologies and disruptive innovations.

The European Innovation Council (EIC) Pilot aims at identifying, supporting and accelerating the scale up of breakthrough technologies and game-changing innovations. Europe has no lack of scientific and entrepreneurial talent, but our innovators do not always have the opportunity to grow their ideas in Europe. The EIC Pilot supports those individual research teams and entrepreneurs with visionary ideas and the ambition to grow in Europe.

I am extremely proud of what the EIC has achieved in its current pilot phase. This report brings together an impressive set of data and examples that demonstrate a range of high-impact endeavours. In the last year alone, over 10,000 of Europe’s most exciting innovators, startups and SMEs were attracted by the programme and applied for support.

It has pioneered a new blended finance approach (combining grant and equity support) and set up the first ever EU investment fund (EIC Fund) dedicated to directly invest in and accompany the growth of potential game-changing EU startups and SMEs. It has demonstrated its agility and responsiveness by responding rapidly to the COVID crisis, actively supporting women innovators, engaging a diversity of innovators from all fields and countries contributing to reduce the Innovation Divide in Europe, and supporting companies to attract over €4 billion of further investment.

2020 is an important year for preparing the fully-fledged EIC, which will be established as a flagship of the new EU framework programme for research and innovation, Horizon Europe (2021–2027). It will provide unique opportunities to build a true European Innovation Area by connecting innovation ecosystems and bringing together our innovative researchers, startups, investors and companies from across Europe and beyond.

It will put Europe at the forefront of the next generation of breakthrough technologies and market-creation companies, hence supporting EU tech sovereignty while keeping a strong international cooperation component, competitiveness and sustainable development for the benefit of EU citizens. I can only encourage everyone who has an interest in European innovation to look at what has been achieved, to witness how Europe is changing fast to meet current and future challenges, and to take part in the next chapter of the EIC as it becomes a full reality in 2021.

What is the European Innovation Council Pilot

Currently in its pilot phase (2018–2020), the European Innovation Council will be fully implemented from 2021 under Horizon Europe, the EU’s next seven-year framework programme. The EIC’s pilot phase has enabled the Commission to test the main features brought in under Horizon Europe, namely targeted calls for future and emerging technologies under the EIC ‘Pathfinder Pilot’ (including Transition to Innovation activities and the Innovation Launchpad), programme managers to run the portfolio of projects in a flexible way, and blended finance (a combination of grant and equity) under the EIC ‘Accelerator Pilot’.

To compete on global markets, increasingly defined by new technologies, Europe needs to capitalise on its excellent research and start-up ecosystem. That is why the European Commission has launched the EIC pilot, a flagship initiative that supports the most talented European innovators in scaling-up their breakthrough innovations fast and efficiently.

This report focuses on the results and impacts of the main two funding schemes of the EIC Pilot – EIC Pathfinder and Accelerator. It includes results from the predecessors of these schemes launched in Horizon 2020: Future Emerging Technologies (FET) and SME Instrument. EIC Partners, including investors, corporates and buyers will discover why and how to work with the EIC portfolio of innovations.

From 2021, the full EIC will be launched with an expected budget of over €10 billion (2021–27) and enhanced funding and support. To capitalise on previous grants, the EIC promotes the transition of projects from EIC Pathfinder, as well as other programmes like European Research Council projects, to the EIC Accelerator through Transition to Innovation activities—additional grants aiming at bringing research results to further innovation stages.

The EIC is a one-stop-shop for innovators, providing support from the idea stage all the way to the market entry. To cover the two key dimensions of the innovation process, the EIC has introduced two instruments: the EIC Pathfinder – to support early applied research – and the EIC Accelerator – to support the commercialisation and scale-up phase.

The EIC Pathfinder

Grant up to €4 million. Target: breakthrough research projects, exploring radically new areas aiming at developing disruptive technologies with market creation potential.

The EIC Accelerator

Blended finance (grants or grants and equity of up to €15 million or more). Target: SMEs with radically new, highly risky, non-bankable ideas and with a potential to scale up.

In addition to funding, EIC beneficiaries receive tailor-made business coaching and business acceleration services. With a network of 750 international business coaches and a growing community of global business and finance partners from the corporate and VC world, the EIC offers innovators specific business support and coaching, ranging from setting up an SME to getting companies ready to scale up and go global.

The EIC also offers its beneficiaries a virtual meeting-place, called the EIC Community Platform, where companies and researchers can connect, share their experiences, find investors, coaches, corporates and leverage potential business partnerships.

The European Investment Bank acts as advisor of the EIC Fund and manages the ownership stakes of the European Commission. The Fund is proactively looking for private investors ready to co-invest alongside the EIC Fund into the supported companies.

“The Advisory Board is focused on helping to create the EIC as the investor of choice for high impact, market-creating, deep tech European entrepreneurs. The EIC will: crowd in other investors through the excellence of the projects it selects and the network of investors it develops, attract corporate partners through focussed events, provide outstanding mentoring and business services and uniquely offer blended finance of grant and equity to allow innovators to rapidly scale. The EIC itself will implement agile, simple, rapid, but thorough, assessment processes. Our focus is to provide European innovators from diverse backgrounds with the opportunity to rapidly develop and scale their innovation in Europe, so benefiting all European citizens and allowing Europe to create the future we want.” — Professor Mark Ferguson, Chair EIC Advisory Board.

How do we measure success? EIC Key Performance Indicators

The EIC Advisory Board was mandated, among other things, to work on the framework that would allow to measure the success of the programme. They have defined the objectives of the EIC as: “Identify, develop and deploy high risk innovations of all kinds with a strong focus on breakthrough, market-creating and/or deep-tech” and to “support the rapid scale-up of innovative companies (mainly startups and SMEs) at EU and international levels along the pathway from idea to market.” 1

In accordance with these objectives and in line with the Horizon Europe Key Performance Indicators (KPIs), they have developed the KPIs based on three storylines: societal impact, economic impact and attractiveness.

Societal Impact: “EIC-supported companies contribute substantially to the SDGs and to Europe’s sustainability transformation.” Economic Impact: “EIC-supported companies add significantly to European GDP and jobs.” Attraction: “EIC is the hallmark of investments in entrepreneurs and researchers, being equal and gender-balanced.”

The overarching message is that the EIC is the hallmark of investments in innovative researchers and entrepreneurs. It vouches for equality and gender balance, and the EIC-supported companies and innovations substantially contribute to sustainability with a particular focus on health, resilience, the green and digital transitions, the GDP and jobs in Europe.

A successful EIC carries the vision that European innovation creates impact connecting industry, academia, politicians, entrepreneurs, and the broad European public. The real power of the EIC is being a beacon that establishes Europe as the 21st century technology and innovation leader, with technological sovereignty and full consciousness of the urgent global need for climate-neutrality and sustainability in the future.

Medium-term indicators (as of year 3+): Share of EIC-supported, disruptive companies based on technologies from EIC and other institutions; Number of scaleups and their turnover; Net Promoter Score for key target groups.

Long-term indicators (as of year 5+): Green Deal impact indicators; Contribution to European GDP; Equal and gender-balanced participation of key target groups and in EIC-supported companies.

Although EIC is still in the Pilot phase, it already delivers on KPIs including SDG contributions, market capital multiple, gender participation, and the share of scale-ups valued over €100 million.

How EIC supports women innovators

In Europe women continue to be underrepresented both in research and the tech field, especially when moving up the academic and corporate ladder. On the other hand, studies show that diverse companies and mixed funds perform better. Increasing the participation of women in deep tech is not only a matter of fairness but also a case of excellent science and economic business case.

Within the EIC portfolio, the gender balance is monitored as an official KPI: 30% of researchers involved in Pathfinder are female and 17% of companies selected in the EIC Accelerator blended finance calls are led by women. Concrete measures introduced by EIC resulted in 34% of companies selected in the May funding round being led by women.

Dr Patricia Scanlon, CEO | SoapBox Labs. Named by Forbes among the global top 50 women in tech. SoapBox Labs develops speech recognition to help children with literacy and fluency. Featured by Silicon Republic and Wired Magazine.

Rosa Palacín, Project Coordinator | CARBAT. Coordinates development of calcium-based batteries to replace lithium-based batteries for higher energy density; vice-president of the International Battery Association.

Cristina Fonseca, CEO | Cleverly.ai. Co-founded Talkdesk and Cleverly.ai. Listed among the Top 50 Europe’s most influential women in startups and VC.

Christine Mummery, Project Coordinator | ORCHID. Coordinated a roadmap for organ-on-chip technology and built a stakeholder network; president of the International Society of Stem Cell Research.

EIC Accelerator and its portfolio of companies

The EIC’s Accelerator supports high-risk, high-potential innovative small and medium-sized enterprises (SMEs) willing to develop and commercialise new products, services and business models that could drive economic growth and shape new markets or disrupt existing ones in Europe and worldwide.

How the companies are selected

Start-ups and scale-ups can apply at any time of the year. Each applicant is assessed by independent experts on their potential social and economic impact, capacity to create new markets and scale up, the high risk and high potential nature of their innovation and, finally, on their business plan. Companies with the highest assessment are invited to make a live pitch to a jury of experienced investors and entrepreneurs who take the final go/no-go decision.

Around 2–3% of applying companies got through this strict evaluation in 2019. They are informed about the result within one month and receive the first part of their grants within five months on average from the application date. For the equity part of blended finance, additional due diligence is undertaken by the EIC Fund to structure the investment.

Projects that do not receive funding but are deemed high quality by the evaluators are awarded a Seal of Excellence. It serves as a quality label to recognise the value of the proposal and helps other funding bodies take advantage of the EIC evaluation process. Since October 2019, 2,537 companies from 40 countries have received Seal of Excellence Certificates.

Gender of EIC Accelerator Pilot jury members: 49% and 51%. Background of EIC Accelerator Pilot jury members: business angels, serial entrepreneurs, innovation and industry specialists, venture capitalists, and others from 35 different countries.

Our portfolio of companies

The EIC Accelerator portfolio includes companies selected under the EIC Accelerator Pilot and its predecessor, the SME Instrument that offered only grant funding, under different selection criteria and only through remote evaluation. The launch of the EIC pilot brought progressively major modifications to the previous scheme: bottom-up calls for SMEs, face-to-face interviews with a panel of experienced innovators and, finally, blended finance support with new evaluation criteria. 2

The EIC Accelerator portfolio includes around 5,500 firms. Companies are active in all sectors, and include all sizes, ages, profiles and verticals coming from 28 EU Member States and many Horizon 2020 associated countries, including Faroe Islands, Iceland, Israel, Norway, Serbia, Turkey, Ukraine and Switzerland. It has attracted young, market-challenging start-ups aiming for fast scale-up, as well as more established businesses that are innovation champions in their field.

Around 71% of the companies in the portfolio received €50,000 grants (SME Instrument Phase 1) and 29% successfully competed for funding above €0.5 million (SME Instrument Phase 2 and EIC Accelerator). All went through a stringent evaluation process as previously explained.

In March 2020, the EIC Accelerator marked a record number of 3,883 eligible applications submitted for a single cut-off. The increase was mainly due to applications to tackle the COVID-19 crisis, and in response an extra €150 million was made available to fund COVID-19 related projects.

Portfolio companies by industry and customer

The EIC Accelerator funds companies in all industry sectors. The top 3 industry sectors in the portfolio are: health (1,262), energy (922) and enterprise software (735). Most of the funded companies are active in the health, energy or enterprise software industry.

When it comes to customers, a large majority (77%) of companies target B2B users with their product or service, while one fourth concentrate on B2C.

Blended finance: a unique support to innovative companies

With an estimated total equity funding gap of about €70 billion, there is a substantial lack of finance for breakthrough and disruptive innovators in Europe. Many European start-ups can’t find high risk capital needed to get to the stage where private sector investors get involved. The EIC blended finance scheme under the EIC Accelerator was introduced to fill this gap in 2019, offering patient capital in the form of equity or quasi-equity (up to €15 million) blended with a grant component (up to €2.5 million).

The equity part is managed by the EIC Fund incorporated in June 2020. The European Investment Bank acts as an advisor to the EIC Fund on behalf of the European Commission. It manages the ownership stakes of the European Commission, runs due diligence, structures inclusive deals vis-à-vis private capital, creates value through connections, and supports investee companies in subsequent rounds and exits.

Both blended finance and grant-only companies are young and small. Almost half are micro companies (1–9 employees) and 62% are start-ups with less than 5 years on the market. At the time of application, 42% of blended finance and 47% of grant-only companies had already received private investments, with blended finance companies showing higher average rounds (approx. €6.3 million vs €2.9 million).

EIC Accelerator Portfolio performance

Until May 2020, EIC Accelerator portfolio companies had attracted over €5.3 billion of private follow-on funding (equity, debt, M&A, IPOs). Out of this, €4 billion (74%) came from equity investments, with the remaining amount from debt funding, IPOs and acquisitions. Within the last 12 months, the cumulative amount of private investment almost doubled.

Equity investments were gathered by 18% of the portfolio’s companies with funding above €0.5 million. The majority of follow-up rounds are Early VC rounds. Series B rounds brought the highest amount of total investments with a total of around €1 billion and on average €19 million per investment.

Investors in EIC portfolio companies are coming predominantly from Europe (Western and Northern Europe 69%). 22% of investments came from the US and 4% from China, in line with overall international investor involvement in Europe. Professional VC Funds account for the largest share of investments; corporate investor participation in European rounds has grown significantly in recent years.

EXITS: IPOs and acquisitions

Seventeen EIC-backed companies have done their Initial Public Offerings (IPOs); 95% are on European stock exchanges. The highest listing proceeds include Bioarctic (€77 m) and Bonesupport (€50 m). Forty-three companies have been acquired; 65% by European companies, 30% by US companies and 5% by Japanese companies.

The combined valuation of EIC-backed companies, for which data are available, is between €20.1 and €28.3 billion, representing 40% growth compared with last year’s cumulated valuation between €14.3 and €20 billion. The Swedish company Arcam is the top valued company in the portfolio with a €636 million valuation (later acquired by General Electric).

EIC Pathfinder and its portfolio of technologies

EIC Pathfinder goes beyond what is already known. It supports high risk, high gain, long term and interdisciplinary scientific research enabling the emergence of visionary innovative ideas that may transform into future technological innovations. The main goal is to make the most promising and creative science-inspired technologies a reality and help Europe compete on a global scale.

The Pathfinder builds on the Future and Emerging Technologies (FET) scheme running under Horizon 2020 since 2014 and previous research framework programmes since the 1990s. Pathfinder includes two complementary lines of action under Horizon 2020: FET Open (bottom-up exploratory research to discover future game-changer technologies) and FET Proactive (establish critical mass in promising exploratory research topics).

Both schemes offer grants between €3–€4 million (in specific cases up to €10 million) to promote collaborative and interdisciplinary research and innovation by consortia of at least 3 entities from 3 different EU member states and associated countries.

How the projects are selected

Proposals are assessed based on three evaluation criteria: excellence, impact, and the quality and efficiency of implementation. Evaluators look for science-to-technology breakthroughs with the potential to make Europe a leader, change market dynamics and address societal challenges. Proposals must address a radical vision challenging current paradigms, demonstrate interdisciplinarity opening new areas of research, and show the team’s necessary expertise.

Proposals are assessed by independent experts first individually, then through a panel. It takes overall about five months (from submission to final ranked list) for applicants to get notified about results. Evaluators’ profiles cover all scientific domains and often include mixed scientist–innovator experience.

Demand is high: in 2019, 952 proposals were evaluated and 151 received EIC funding (success rate 16%). The 2020 Pathfinder Open call (closed on 3 June 2020) registered a record number of 902 proposals.

The EIC Pathfinder portfolio of technologies

The EIC Pathfinder portfolio includes 431 funded projects with more than 2,774 participants that received overall €1.2 billion since 2014. The average project has 6.4 participants and €2.8 million in funding. Half of the participants come from academia, 25% are research organisations and 22% private companies, including 16% SMEs.

60–70% of projects involve one or more SMEs as beneficiaries, much higher than overall Horizon 2020 (33%). Participants come from 49 countries, including all EU member states, Horizon 2020 associated countries and non-European countries (US, Canada, Australia, China, Brazil). 55% of participants come from France, Germany, Italy, Spain and the Netherlands.

Projects are interdisciplinary and most have proof of principle in specific applications. Health is the largest application area (37%), followed by Digital/ICT (30%), Manufacturing & Infrastructure (16%), and Energy & Environment (15%), with Food & Agriculture at 2%. Technologies include materials (51%), biotechnology & bioengineering (33%), data (10%) and engineering (6%).

“Thanks to the EIC-funding our technology brings nature back into buildings. It’s a bit like the revitalising feeling we get after a walk in the forest. Our aim is to reduce and eventually eliminate our dependency on fossil-fuel-based systems in buildings, whilst also giving us value back and boosting sustainability” — Rachel Armstrong, Project Coordinator.

EIC Pathfinder Results – from research to innovation

Scientific publications are one of the earliest results. The EIC Pathfinder portfolio (2014–2019) has produced over 3,700 publications, out of which 2,662 are peer-reviewed. Over 72% are in high-profile journals (e.g., 188 in Nature and 39 in Science), compared with 57% across Horizon 2020. Pathfinder delivers 16 publications in high-profile journals per €10 million of funding (vs 8.8 in Horizon 2020).

Innovation Radar experts systematically monitor projects to identify innovations, their maturity and market context. So far, 590 innovations were identified in 150 projects; 76% address emerging or market-creating opportunities, with the remainder in mature or not-yet-clear markets.

EIC Transition to Innovation

The EIC aims to become a one-stop-shop for innovations. Once a breakthrough technology with market potential enters the EIC, it can receive funding, coaching, advice and network support to succeed on the market. Transition to Innovation grants build on results from FET or Pathfinder projects to bring technologies to actual use, possibly via start-up or spin-off creation. So far, 13 projects have been funded (average budget €2 million, two years).

Innovation Launchpad grants (up to €100,000) fund further innovation-related work not covered by original projects, verifying innovation potential and supporting next steps toward market. Since 2016, 74 projects were awarded, including 32 SMEs, and regularly participate in workshops.

Impacts of FET – What do we learn from Pathfinder’s predecessor

Research needs time to reveal its impacts. The “ FET Traces” study (2018) analysed 224 FET Open and Proactive projects (2007–2014). It confirmed FET’s interdisciplinary and novelty: 36% of projects had impact on more than 20 scientific fields; 83% dealt with research ideas not present in the scientific community before; 29% received scientific awards.

Economic impact indicators were strong: 33% had at least one publication with industry partners (e.g., IBM, Panasonic, Thales); 25% reported at least one patent application; and 12% led to the founding of a spin-off company.

How to work with the EIC Portfolio

Become an EIC Evaluator

The EIC benefits from an extended and diverse pool of evaluators, across profiles and gender. For the EIC Pathfinder, the majority of evaluators came from academia (52%), research organisations (24%), and private firms (6%). In the EIC Accelerator, around 26% are venture capitalists, 29% innovation and industry specialists, 24% entrepreneurs, 21% business angels and other experts.

Experts evaluate proposals independently or meet virtually to interview applicants and select the best innovators. Evaluators gain access to cutting-edge projects and a European network. The activity is financially compensated. Become an expert for Pathfinder and the Accelerator.

“The EIC project has made it possible for European research teams engaged in disciplines as varied as Medicine, Physics, Physiology and Engineering to come together to achieve breakthroughs that meet the needs of patients suffering from chronic diseases.” — Alain Nogaret, Project Coordinator.

Co-invest with the EIC Fund

The Accelerator offers equity or quasi-equity support; the EIC Fund manages the equity investment and offers opportunities for private investors to co-finance highly innovative companies. The rigorous evaluation ensures the best companies are selected. Partners access a one-stop shop of innovations across Europe, saving time and resources on scouting and due diligence.

The EIC also looks for investors to become mentors of companies selected for blended finance, providing strategic advice, networking opportunities and fundraising support. Co-investing alongside the EIC Fund can de-risk rounds into companies otherwise considered too risky.

Join EIC Business Acceleration Services

The EIC support goes far beyond funding. It offers top, tailor-made Business Acceleration Services to accelerate innovations and scale up companies, leveraging a wide international network. By working with the EIC, partners can access 5,700+ quality-stamped companies and 430+ innovation-driven research teams across all fields.

EIC Community: an exclusive virtual meeting place with a directory of over 5,700 EIC companies and 440 research teams, a community forum, event tools, and a marketplace to announce innovation challenges. Visit the EIC Community.

Corporate Partnership Programme bridges EIC innovators and large corporates via matching events ( Corporate Days) and challenge-based collaboration. Up to 25% of participating companies close follow-up deals after EIC events.

Buyers Partnership Programme connects EIC innovators with public and private buyers through early market consultation and procurement scouting days, overcoming barriers for start-ups in procurement.

Investors Partnership Programme connects beneficiaries with 170+ investors in Europe’s finance hubs via pitching events, and collaborates with stock exchanges and agencies. Up to 20% of participating companies have follow-up discussions with investors.

“The EIC BAS events we attended got us funding, business, as well as access to an immense network. They put us in touch with decision makers we normally don’t meet. For small companies like us that is really valuable.” — Corinne Versini, CEO.

If you want to work with us please get in touch via the contact form of the EIC Community. Check the EIC Business Acceleration Services calendar.

EIC Deep tech innovations for recovery

The health sector after COVID-19

The coronavirus pandemic has affected every area of our lives, with a primary impact on the healthcare system. Many EIC-funded projects have been mobilised to curb the pandemic. Novel medical technologies such as innovative testing benefit Europe significantly and are crucial to avoid relapses.

Health tech in the EIC Portfolio: 1,265 companies; 125 Pathfinder projects; €1.3 bn EIC funding; €2 bn follow-up investments.

Digital technologies for the recovery

The crisis accentuated the central role of digital tech and the urgent need to speed up Europe’s digital transformation, from remote work to digital services and “lights out” supply chains. This transition will continue during recovery.

Digital tech in the EIC Portfolio: 1,954 companies; 101 Pathfinder projects; €1.3 bn EIC funding; €2.2 bn follow-up investments.

Innovations supporting the Green Deal

The EU’s climate goals are ambitious: reduce greenhouse gas emissions by 40%, increase the green energy share to 32% and increase energy efficiency by 32.5% by 2030. The European Green Deal targets climate neutrality by 2050. The EIC supports this through renewable energy, plastic recycling, circular economy, and energy efficiency in buildings and transport.

Green tech in the EIC Portfolio: 1,600 companies; 50 Pathfinder projects; €1 bn EIC funding; €1.15 bn follow-up investments.

Examples: Arkyne Technologies (ES)—electricity from plant photosynthesis; DIACAT (DE)—diamond materials for photocatalytic conversion of CO2 to fuels using visible light.

Examples: H55 (CH)—electric propulsion for air transport; NeuroMotive (DE)—neuro-robotics traction control for automotive.

Methodology Note

Private investment data were collected with Dealroom.co, using big data to track publicly available information on innovative companies (investments, exits, accelerator support). It covers about 85% of all transactions, given that some rounds are not disclosed; actual numbers are likely higher.

Financial performance information comes from obligatory self-reporting by companies and the Orbis database, which compiles official sources including national registries. 5

Pathfinder patents and publications data come from project reports. The report also uses Innovation Radar experts’ assessments, which systematically monitor EIC Pathfinder projects to identify innovations, maturity, market competition and societal dimensions.