The EU funded report reveals a strategic opportunity hiding in plain sight, and how smarter public-private collaboration could accelerate Europe’s innovation edge.
Back in March, the Innovation Radar Bridge initiative produced a report for the European Commission titled “Startups backed by the EU’s Framework Programmes”, a data-rich overview of how EU-funded startups, supported through grants, equity, and R&D programmes, have fueled the emergence of a high-impact innovation ecosystem across the continent.
Its findings? Striking. With just €12 billion in public support, over 13,600 startups have collectively generated €520 billion in enterprise value and attracted €70 billion in private VC. Yet only 5% of total EU innovation funding reaches startups directly.
As Europe sharpens its strategic focus in areas like AI, biotech, quantum, and climate tech, the report makes a strong case for scaling what already works. EU-backed startups are delivering high impact, and more can be done to help them grow.
EU support builds confidence, not hesitation
For early-stage investors, the presence of EU support in a startup’s history is increasingly seen as a positive signal.
Dag Ainsoo, General Partner at Startup Wise Guys, says his team regularly backs companies with EU funding histories, and has not encountered concerns from international investors during follow-on rounds.
“We are an EU-based early-stage investor. In most cases, we’re the first institutional backer on the cap table. Many of our portfolio startups later raise from UK or US investors, and I’ve never seen EU funding be a point of hesitation.”
This supports one of the report’s broader implications: public investment is helping de-risk innovation and unlock a new layer of investable startups, particularly in deep tech.
Public programmes are advancing Europe’s tech autonomy
EU programmes are not only bridging early-stage gaps, they’re also aligned with broader geopolitical and industrial priorities.
As Stéphane Ouaki, Head of Department at the European Innovation Council (EIC), puts it in the report:
“The EIC helps startups and SMEs to develop and scale up their breakthrough innovations, strengthening Europe’s technological sovereignty and industrial competitiveness.”
His message underscores the EU’s strategic intent: this is not just innovation for its own sake, but part of a broader effort to reinforce Europe’s position in critical areas of competitiveness through targeted public investment.
Scaling success takes more than money
While EU-backed startups tend to outperform peers in terms of technical depth and early traction, many still face challenges when scaling beyond Series A.
According to Ainsoo, solving this challenge requires more than capital. Founders need early teams willing to take risks, corporates must be open to working with startups, and the broader ecosystem needs to reduce friction, not add it.
“Companies like Skeleton Technologies show what’s possible,” he adds, referring to the energy storage scale-up now backed by several European programmes. “We believe many more like this will emerge.”
A case in point: Czechia’s efficient innovation model
Among the report’s standout ecosystems, the Czech Republic offers an example of how EU alignment can translate into results.
Renata Dosdá, Public Affairs and Venture Capital Specialist at CzechInvest, explains that Czechia’s strength lies in its engineering talent, problem-solving culture, and the strategic use of EU frameworks.
“The Czech Republic has a long-standing base of deep tech expertise. Our startups are often able to compete internationally with relatively modest funding, especially when supported by EU instruments,” she says.
This has translated into success across cybersecurity, AI, quantum computing, and medtech. Rather than being concentrated in one hub, Czech innovation is geographically distributed but globally connected.
Renata adds, “Talent density and global ambition are key, and EU support helps amplify both.”
Where founders should focus
CzechInvest and Startup Wise Guys both emphasize that EU programmes work best when founders treat them as strategic levers, not just grant opportunities.
Founders who succeed tend to:
- Match their technology to the correct Technology Readiness Level (TRL)
- Align their product with broader EU missions, such as digital sovereignty, health resilience, or industrial competitiveness
- Build a value proposition that combines business case with public impact
These EU-funded startups are better positioned for follow-on funding, cross-border collaboration, and long-term European growth
Why early-stage support should scale through accelerators
One of the report’s central challenges is that only a fraction of innovation funding reaches startups directly. From Ainsoo’s view, the EU should scale support through proven private actors.
“EU programmes should funnel their money via private EU-based accelerators, like Startup Wise Guys or Antler, who have the skills and know-how to allocate money in early-stage venture effectively,” he says. “If we want to compete with the US, this is where EU backing should go.”
He adds that public support needs to reach startups earlier, when capital is most needed and outcomes are still uncertain. “If we lose the best founders to the US, we’re not just losing companies—we’re weakening the whole ecosystem.”
What needs to improve
The report makes several concrete recommendations for how EU programmes can evolve:
- Establish faster, startup-specific funding tracks in FP10
- Improve clarity and speed around equity disbursement, especially via the EIC Fund
- Strengthen university-to-startup spinout support
- Scale up visibility platforms for startup-investor matchmaking
As Thijs Povel, founder of Dealflow.eu and Ventures.eu, noted in a recent EU-Startups interview, one of the key challenges is ensuring EU-backed startups are better connected to private capital. He emphasized that improving this bridge is essential to turning early public investment into sustainable, scalable growth.
Why you should download the report
EU-backed startups are delivering exceptional impact at relatively low cost. They are already advancing Europe’s position in critical sectors and offer some of the continent’s strongest scale-up potential. But to truly compete on a global stage, Europe must go further: fund earlier, move faster, and strengthen the bridge between public support and private growth.
Whether you’re a founder, investor, policymaker, or working with corporates, the report offers valuable insights and clear takeaways. Click here to download the full report.
You can also check out the Dealflow.eu Community on Slack, a space built by the Innovation Radar Bridge consortium including Dealflow.eu, Dealroom.co and EU-Starutps, where innovators, founders, and investors exchange ideas, share resources, and stay updated on the latest EU-backed opportunities.
Read the orginal article: https://www.eu-startups.com/2025/06/from-e12-billion-to-e520-billion-eu-funded-startups-show-massive-roi-but-face-scaling-gap/
