Brussels is launching a fresh fund to boost investment in startups across Europe which is expected to create more than a billion euros in capital ready to be put into up-and-coming technology firms.
The European Commission will commit up to €400m (£357m) to the European Investment Fund's (EIF) new fund-of-funds and will look for three times more investment from institutional investors to make up to €1.6bn available.
The fund is seeking to address the disparity between funding in the region which is dwarfed by the multi-billions of dollars flowing into Silicon Valley.
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The EU cash shores up funds that can be invested in startups across Europe and is seeking to attract large investors to venture investments.
"There's far less venture capital in Europe than in the US, and funds don't have the scale or geographic scope to grow companies from early stage to mid-cap and from mid-cap to global players," said Carlos Moedas, the EU commissioner for research, science and innovation at the Web Summit event in Lisbon.
An EU spokesperson told City A.M. that UK fund managers are still welcome to apply to run the fund, despite the vote for Brexit, saying at the moment nothing has changed and the UK is still a member country
“The Commission’s Venture Capital Fund of Funds is the initiative the industry needs to attract more private investment to support more of Europe’s most talented entrepreneurs and innovators," said Michael Collins, chief executive of Invest Europe, a VC trade association.
“It will allow more global investors to access Europe’s thriving start-up scene, helping more of our world-class small businesses develop into household names and helping investors to secure the returns they need in a low yield environment."
In the UK, Balderton, Atomico, Northzone and Scottish Equity Partners, which announced its own £260m fund on Monday, are among those with existing funding from the EIF, as are private equity firms Mayfair Equity Partners and Lyceum Capital.
Funds from the EIF are a major backbone of UK venture capital, accounting for around 37 per cent of all money raised by startups from 2011 to 2015, and many in tech have been calling on the government for guarantees that funding will continue after Brexit.
However, the terms of access to the EIF will be one of the many things to be discussed in Brexit negotiations, leaving question marks hanging over how UK startups and the country's tech sector may benefit from the new cash.