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The European Commission and the European Investment Fund have launched a new investment fund to support venture capital and growth financing for technology startups.

ESCALAR, the new investment mechanism, will provide €300 million ($328 million) in funding to support the block’s economic and technological sovereignty.

The fund is backed by the European Fund for Strategic Investments and is expected to trigger investments of up to €1.2 billion ($1.3 billion) or four times the original investment.

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The unveiling of ESCALAR is part of the EU Commission’s new SME strategy to improve access to finance for SMEs and early-stage technology startups.

Commissioner for Internal Market Thierry Breton said: “Commission is deploying all tools at its disposal to help companies overcome the coronavirus crisis. Today, we are strengthening our support to the many promising European companies to ensure they can continue to develop and grow in Europe. With ESCALAR, we are helping unlock significant additional private investments to support the creation of tomorrow’s market leaders.”

EIF Chief Executive Alain Godard said: “Scale-ups need to find growth finance to take their businesses to the next level. ­­ By improving the financing environment, more EU scale-ups may choose to stay in Europe to continue their growth, which is even more crucial now in this time of crisis, when growth companies may need additional support from their investors. The ESCALAR pilot can help the funds themselves to scale up, resulting in larger fund sizes, thereby supporting the EU’s late-stage venture capital and growth-focused fund ecosystems.”

Interested fund managers can participate in the scheme by responding to the open Call for Expressions of Interest here.