€5 billion Scaleup Europe Fund aims to close the EU’s investment gap in high-growth innovation

The European Investment Bank (EIB) and European Investment Fund (EIF) have secured

commitments from a group of leading institutional investors to create the Scaleup

Europe Fund, a €5 billion initiative to help high-growth European companies stay and

grow within the EU.

The fund is designed to tackle a long-standing weakness in Europe’s innovation

ecosystem: the lack of late-stage capital. While the EU has no shortage of early-stage

investment and public research funding, many promising start-ups struggle to find

large-scale financing once they reach the growth phase. The result has been a

persistent “scale-up gap” — with companies frequently moving their headquarters or

listing abroad, particularly in the United States, to access deeper capital markets.

The Scaleup Europe Fund aims to change this dynamic by creating a pan-European

vehicle capable of making large, patient investments in growth-stage firms,

particularly in capital-intensive sectors such as digital technologies, climate innovation,

and health. Unlike earlier EU instruments, the fund will be jointly financed by public

and private investors, including major pension funds, insurers, and sovereign wealth

funds.

The EIB Group, which has been instrumental in shaping the fund’s structure, will now

launch a call for expressions of interest from private fund managers, who will be

responsible for managing the portfolio and selecting investments. The first

commitments and disbursements are expected in 2026.

According to the EIB, the fund will operate on commercial terms but with a strategic

policy mandate: to prevent Europe’s most innovative companies from being acquired

or relocated abroad due to lack of domestic growth capital. The model resembles large-

scale public–private investment platforms in the U.S. and Asia, which combine

institutional capital with policy-driven goals to strengthen strategic industries.

The announcement was welcomed by industry groups and policymakers, who see it as

a concrete response to repeated warnings about Europe’s innovation lag. The European

Commission and the EIC Forum have for years argued that fragmentation in Europe’s

financial markets hampers the continent’s ability to turn world-class research into

industrial competitiveness.

The Scaleup Europe Fund is expected to complement existing EU initiatives such as

the European Innovation Council (EIC), InvestEU, and Horizon Europe, focusing on

later-stage support rather than seed or early venture phases. Its backers emphasise

that it will not compete with national programmes but rather leverage private co-

investment to expand overall financing capacity.

Although its focus is broad, covering digital, industrial, and green technologies,

observers say the fund could have significant spillover benefits for the life sciences

and health innovation sectors — including advanced neurotechnologies,

biomanufacturing, and next-generation mental health treatments. These fields often

face high regulatory barriers and long development timelines, requiring the kind of

patient capital that Europe has historically lacked.

The initiative also fits into the broader European debate on strategic autonomy. As the

EU prepares its next long-term budget and deepens work on the European

Competitiveness Fund, the Scaleup Europe vehicle will be a test of whether Europe

can move beyond pilot schemes and build durable financing institutions that match

global peers.

If successful, the fund could act as a blueprint for future joint investment platforms in

other critical sectors, helping Europe retain ownership of its innovation pipeline while

giving investors exposure to long-term, high-potential growth.

With its launch, the EU takes a tangible step toward closing the scale-up financing gap

that has long limited its ambitions — positioning Europe not just as an incubator of

ideas, but as a home for their global success.