EU boost to venture capital investing

The European Commission has launched a new venture capital (VC) funding programme, VentureEU, with €410 million in fresh funding, to encourage institutional investors to back innovative start-ups across the continent.

The launch was welcomed by Invest Europe CEO, Michael Collins, who said: “For the last eight years, Invest Europe has advocated using public money in new ways to bring in more private capital and facilitate the next stage of venture capital’s evolution in Europe. It is a great step forward for investment in European innovation that this is now becoming a reality.”

Six new pan-European VC fund-of-funds have been launched by the European Commission and the European Investment Fund under the initiative, with the aim of private institutional investors matching the €410 million in funding from the EU. The programme, first announced in 2015, was part of the Capital Markets Union action plan. Under it, the six VC fund-of-funds will commit capital to a selection of VC funds in at least four European countries per fund-of-fund. In turn, the VC funds will invest in a range of start-ups and SMEs in a range of sectors.

It is hoped the programme will boost European VC investment by pension funds and insurers who currently find European VC funds too small. The average European VC fund is around €65 million, whereas institutional investors prefer a minimum fund size of €150 million.