The European Investment Fund (EIF), Europe’s largest fund of funds, has allocated more than €1bn into four European growth funds to back European scaleups, it announced on Monday.
As previously reported by Sifted, the EIF is backing the UK’s Atomico and France’s Keensight. It’s also backed Italy’s FSI, a private equity firm, which is raising €1.5bn for Italian mid-sized companies, and is close to closing a deal with a fourth fund, which currently remains undisclosed.
The money comes from a new vehicle that was announced in February 2023, dubbed the European Tech Champions Initiative (ETCI), a €3.75bn fund of funds — which is managed by the EIF. The ETCI is financed by the European Investment Bank, as well as the governments of Germany, France, Spain, Italy and Belgium — and was launched to invest in firms raising funds of €1bn or more that would be able to back European “tech champions” in Series B rounds and above.
There’s been growing criticism across the continent’s startup ecosystem that the money will go to private equity firms, which usually raise larger funds and are often more conservative than traditional VCs. But the EIF insists that the companies it backs with ETCI, whether private equity firms or VCs, are all well-suited to support fast-growing European tech companies.
“We will drive innovation, empower entrepreneurs and position the European Union as a hub for technology and growth,” Roger Havenith, EIF’s deputy chief executive, said in a statement.