EU's New Pact Could Solve Startup Funding Woes

Jan de Vries · 2026-09-23

For years, Europe's most promising startups have faced a frustrating reality: they can get off the ground, but scaling up often means looking across the Atlantic. That might be about to change. The European Commission and the European Investment Bank (EIB) Group have just launched the European Institutional Investors Pact (EIIP). It's a voluntary framework designed to channel more long-term institutional capital into Europe's tech and scale-up ecosystem. Think pension funds, insurers, and banks finally putting serious money into European venture and growth equity. ### What Exactly Is the EIIP? The Pact was unveiled at the TechEU Equity Summit in Luxembourg. Already, thirteen institutional investors have signaled they're ready to invest. Most of that money will flow through two existing vehicles: - The European Tech Champions Initiative (ETCI) 2.0, which has about $16.3 billion (€15 billion) at its disposal. - The Scaleup Europe Fund, with around $5.4 billion (€5 billion). That's a lot of firepower. And it's aimed squarely at the late-stage funding gap that has plagued European startups for years. ### Why This Matters for Startups Raising a Series B or C in Europe has historically been tough. Especially for rounds above $108 million (€100 million). Many founders end up courting US investors, and sometimes that means moving headquarters overseas. The EIIP wants to change that. As European Commission President Ursula von der Leyen put it: "Talent, ideas and ambition – Europe has all of these. Now we are making sure our innovative companies can grow, scale and lead on the global stage – from Europe." That's the goal: keep European innovation in Europe. ### How the Pact Works The EIIP rests on two pillars: - A Policy Dialogue Forum, led by the Commission, where institutional investors can engage on regulatory and investment policy. - An Investment Platform, led by the EIB Group, which gives investors access to deal flow, market intelligence, and peer exchange across Europe's VC and growth equity ecosystem. The platform will work closely with EU member states and align with existing national initiatives. The idea is to make it easier for big investors to find and fund the best European scale-ups. ### The Bigger Picture Europe has no shortage of innovative startups. But when they need serious growth capital, the well often runs dry. The EIIP aims to connect Europe's deep pools of long-term capital—like pension funds—with its most promising innovators. Nadia Calviño, President of the EIB Group, said: "Our goal is clear: to provide Europe's institutional investors with a single, credible entry point into innovation financing." Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation, added: "What many companies still lack is access to sufficient late-stage capital. With the European Institutional Investors Pact, we are helping connect Europe's deep pools of long-term capital with its most promising innovators so they can scale up and stay in Europe." ### What to Watch For If this works, we could see more European startups staying independent and scaling from their home turf. That means more jobs, more innovation, and a stronger European tech ecosystem. But it's not a magic bullet. The EIIP is voluntary, and it will take time for institutional investors to shift their strategies. Still, with 13 investors already on board and billions in existing funds, it's a serious step in the right direction. For founders, this could mean easier access to growth capital without having to uproot. For investors, it's a chance to get in on the ground floor of Europe's next tech champions. And for Europe as a whole, it's a bet on its own future.