What’s Scaleup Europe, the $5.7B fund that just backed satellite company ICEYE?

Forget the European summertime lull: startups can’t spend to enactment still, and Brussels is pursuing suit. In the mediate of highest abrogation time, the European Commission announced that the Scaleup Europe Fund was afloat operational, with investments “expected successful the coming weeks.” But its archetypal woody was really made nationalist the precise adjacent day.

ICEYE, a Finnish outer quality institution present valued supra $11 billion, is the archetypal startup backed by this unsocial public-private vehicle, which co-led its Series F. Similar deals should travel soon; Scaleup Europe plans to deploy €5 cardinal ($5.7 billion) into growth-stage startups based successful the EU oregon partnering countries and operating successful strategical sectors.

“Space-based quality is becoming captious infrastructure for governments, and the Scaleup Europe Fund exists truthful companies similar ours don’t person to permission Europe to vie globally,”  ICEYE CEO Rafal Modrzewski (pictured above) wrote connected LinkedIn.

Even successful little captious sectors, helping Europe physique scaleups and support them is cardinal for its competitiveness and tech sovereignty — and that’s besides the fund’s raison d’être. With the condemnation that Europe misses retired erstwhile its heavy tech endowment lacks late-stage backing oregon lone finds it abroad, the Commission took the substance into its ain hands, but it besides partnered up.

Unlike different programs that are managed straight by European institutions and handing retired nationalist monies, Scaleup Europe is backed by backstage investors and tally by Swedish plus manager EQT, which was selected via an open call to “experienced money managers.”

Other candidates reportedly included Eurazeo, Northzone and Vitruvian Partners, with Atomico arsenic last challenger. While it has offices crossed Europe, the steadfast whitethorn person been hindered by having its office successful London. But having pointed retired the maturation backing spread for years, inactive described Scaleup Europe arsenic “urgent and necessary” erstwhile EQT was announced arsenic the winner.

As for EQT, it described the inaugural arsenic a “big infinitesimal for Europe.” “Europe has proven its quality to make palmy early-stage exertion companies, the situation is present to standard those businesses into becoming planetary leaders portion maintaining their European roots,” EQT CEO and managing spouse Per Franzén commented successful a statement.

Notably, the Commission has fixed the money manager immoderate leeway arsenic to wherever to put — with a mandate “including but not constricted to heavy tech, beingness sciences, cleanable tech, precocious manufacturing, and integer technologies.” For EQT, this volition overlap with the likes of AI, biotech, energy, robotics, semiconductors and abstraction — arsenic shown by ICEYE.

With ties to the Wallenberg family, which was initially listed arsenic a imaginable anchor investor of the fund, EQT was arguably a front runner to tally Scaleup Europe. With much than $300 cardinal successful assets nether management, it volition besides beryllium tasked with helping the money scope its full fundraising people — starting with a “significant commitment” of its ain capital. 

It is unclear however overmuch superior Scaleup Europe has raised truthful far, but its archetypal closing was anchored by a €1 cardinal concern from the Commission (approximately $1.15 billion) investing alongside organization investors from each crossed Europe, credited arsenic “founding investors.”

According to nationalist information, these founding investors see German security elephantine Allianz; APG, representing Dutch pension money ABP; Spanish bank-affiliated funds CriteriaCaixa and Santander-owned Mouro Capital; Italy’s Fondazione Compagnia San Paolo, Intesa Sanpaolo and Fondazione Cariplo; and Denmark’s EIFO and Novo Holdings.

Scaleup Europe’s fundraising is expected to widen into 2027, with a 2nd fundraising circular described arsenic perchance unfastened to non-European investors, arsenic agelong arsenic these are aligned with Scaleup Europe’s objectives. 

This mightiness beryllium a indispensable compromise to rise the benignant of superior Scaleup Europe is seeking. According to reports, the Commission suggested it could yet grow to €25 cardinal ($28.9 billion). If it does, it would commencement belonging to the aforesaid class arsenic Asian and U.S. maturation funds. 

As it stands, Scaleup Europe’s €5 cardinal people already makes it an outlier successful the EU — VC firms successful continental Europe typically negociate millions, seldom billions. But with the EIF’s European Tech Champions Initiative actively backing growth-stage VC firms arsenic a fund-of-funds, this could rapidly change. In different words, Scale Europe whitethorn soon conscionable beryllium determination to capable the gap.