What do companies such as Skype, Beddit, Shazam and Minecraft have in common? The fact that all of them are successful European startups. But also the fact that all of them were acquired by US companies such as Apple or Microsoft. Are these European success stories or not?
It comes as no surprise that the US is leading the tech startup market driven by its extraordinary big tech players and the investment power of Silicon Valley. Across the Atlantic, Europe struggles to offer European tech startups some funding opportunities to be globally competitive and make an impact worldwide. To achieve this, the European Commission has launched some ambitious programs to foster innovation and invest in promising companies.
Europe: on the way to become more innovative
The US and China have taken the lead in disruptive areas such as genomics, quantum computing, and artificial intelligence, where Europe is lagging behind them. Unfortunately, in the past 10 years, most European entrepreneurs did not receive the support and funding needed to take their businesses to the next level, so they had to look for this support elsewhere.
However, not all is bad news: there are some powers that still remain in Europe. Countries such as Sweden, the UK or Germany have proven to be highly innovative for they have given birth to several European unicorns. In addition, Europe is already on its way to become more innovative by investing in new technology.
What is making Europe become more innovative?
Image by Michelle Raponi in Pixabay
A few years ago, the European Commission founded some instruments aimed at developing and promoting research and innovation across the continent, such as InvestEU, the European Institute of Innovation and Technology (EIT), the European Innovation Council (EIC), Horizon Europe (HE), etc.
As Europe is on its way to become more supportive in terms of innovation, it is launching long-term programs and providing more funding opportunities in the form of grants and equity investment.
Top 4 European grants
The EIC Accelerator is the main instrument promoted by the European Commission to boost tech startups. Its main objective is to fund high-risk high-impact projects with a budget that raises to €7B until 2026. However, it is an extremely selective program as only 2-6% of the applications are successful. Its focus is on helping deep-tech and science-based companies based in Europe reach the market by providing grants, convertible loans and equity investments.
The Eurostars program is aimed to support innovative SMEs and project partners such as large companies, universities, or research organizations by funding international collaborative R&D and innovation projects. With a total budget of €1B, Eurostarsoffers €114,000-€500,000 to fund projects that lead to the creation of new products, processes and services that can be rapidly commercialized in European or global markets.
The EIC Pathfinder is a program from the EIC that focuses on R&D. With a budget of €300M, it seeks to support new ideas for new technologies, so its focus is on high-risk / high gain and cutting-edge science collaborations that develop technological breakthroughs.
To help researchers and founders, the EIC Pathfinder offers grants of up to €4M to promote the early-stage development of new technologies.
The EIT has a myriad of funding programmes aimed at entrepreneurs, early stage startups and scale-ups. The EIT Health Innostars Awards is a relatively new program launched by the EIT, whose aim is to support early-stage health industry ventures that want to make their business concepts prosper and bring them to the domestic and international market. It focuses on SMEs, startups and spin-offs.
Applicant startups can receive a financial reward of 25,000€, but only 10 companies will become finalists to compete for three possible prizes: an additional 25,000€; 15,000€, or 10,000€ in funding. Participants must come from countries from Central, Eastern and Southern Europe so as to promote innovation all over the continent, given that these regions show lower levels of innovation than other European countries.
Benefits of the European innovation
Europe is aware of how important investing in innovation is and thus it is launching more and more programs to help startups get off the ground and scale up.
Europe still has a long way to go to promote research and innovation and catch up with some countries such as the US, but it aims to recover its industrial and economic leadership with these programmes. After all, if unicorns exist, why shouldn’t phoenixes exist as well?