The European Commission and European Investment Fund (EIF) are launching ESCALAR, or European Scale-Up Action for Risk Capital, a new investment approach that will support venture capital and growth financing for companies, enabling them to scale up in Europe and “help reinforce Europe’s economic and technological sovereignty.”
ESCALAR will provide up to €300 million, aiming to increase the investment capacity of venture capital and private equity funds, potentially leading to investments of up to €1.2 billion (or four times the original ticket) to support promising companies.
“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,” said EIF Chief Executive Alain Godard. “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.”
The ESCALAR initiative has been in the works for years, as part of a new SME strategy to improve access to finance for small and medium-sized businesses. The current coronavirus outbreak and ensuing economic turmoil has triggered the launch of the program.
“The Commission is deploying all tools at its disposal to help companies overcome the coronavirus crisis,” said Commissioner for Internal Market Thierry Breton.
The program will remain in pilot phase for 2020 with the objective that ESCALAR could become a mainstream European financial instrument.
Interested fund managers can participate in the scheme by responding to the EIF’s open Call for Expressions of Interest.