A new report from Dealroom, in partnership with Dealflow.eu and EU-Startups, reveals how EU grants and Framework Programmes like Horizon have fueled the growth of European startups. With just €12 billion in direct funding, these startups have secured an additional €70 billion in venture capital and are now collectively valued at €520 billion.
According to the report, the European Union’s Framework Programmes have provided €12 billion in direct funding to startups, which subsequently secured an additional €70 billion in venture capital funding. The supported companies are now collectively worth around 10% of all venture-backed startups in Europe.
Yoram Wijngaarde, founder and CEO of Dealroom, emphasized the significance of these findings, stating that the data highlights how public funding can de-risk early innovation and pave the way for private capital.
He noted that the €12 billion investment in EU funding has catalyzed companies now worth €520 billion, with major strategic wins in key technology areas such as BioNTech and ARM. Given that startups represent just 5% of Framework Programme funding but yield such transparent and promising returns, Wijngaarde advocates for increasing their allocation in future programmes.
The Innovation Radar Bridge project report integrates EU data with Dealroom’s global startup intelligence, analyzing over 13,600 EU-backed startups. This marks the first in-depth assessment of the impact of EU startup support programmes on growth and innovation.
Over the past 40 years, the EU has allocated significant research and innovation funding through initiatives like the Seventh Framework Programme, Horizon 2020, and Horizon Europe. Of the total €225 billion deployed across these programmes, approximately €12 billion (5%) has been directed toward startups.
Notable success stories and sectoral influence
Key success stories include BioNTech, which played a crucial role in Covid vaccine development, and ARM, a global leader in mobile chip technology. Although ARM benefited from an earlier 1990s Framework Programme and is not included in the €400 billion valuation of current startups, its addition brings the total value creation to €520 billion.
The report also highlights that 74% of EU-backed startups manufacture physical products, mostly in frontier technology areas, compared to 25% across the broader European ecosystem. EU support has played a key role in sectors such as SpaceTech, Semiconductors, ClimateTech, and Robotics.
Moreover, EU-backed startups demonstrate higher graduation rates between venture capital rounds compared to non-EU-funded European startups. These findings reinforce the EU’s role in de-risking and accelerating the growth of European tech champions, particularly in DeepTech fields like AI, Robotics, and ClimateTech.
Key observations from the report:
- Only 5% of EU innovation funding is allocated to startups, despite their pivotal role in Europe’s future and global innovation.
- Over the last three EU Framework Programmes, 13,600 startups have received funding, totaling €12 billion from the EU and €70 billion from private VC, now collectively valued at €520 billion.
- EU-backed startups in DeepTech sectors demonstrate higher graduation rates but still require further funding to scale.
- The complexity of existing EU funding programmes presents challenges for startups seeking access to support.
- EU funding has provided a strong launchpad for startups and serves as an attractive pipeline for private investors.
Furthermore, the impact of EU-backed funding on European startups makes a strong case for increased investment in the next wave of innovative companies, shaping the future of the continent and its industries.
