The European Union is finalising plans to establish a €5bn Scale-Up Europe Fund to support high-growth companies in strategic technologies including artificial intelligence, quantum computing, and advanced materials, according to sources cited by Bloomberg.

The fund, which has already secured €3bn in investor commitments and an additional €1bn from the European Innovation Council, will target late-stage funding rounds of more than €100m. It aims to help European startups scale globally while keeping their headquarters and core operations within the region.

Denmark’s EIFO sovereign fund, Spain’s Criteria Caixa, and the Novo Nordisk Foundation are among the investors currently in discussions to participate. The European Investment Bank is also considering joining the initiative.

The European Commission ultimately hopes to expand the fund’s capacity to €25bn as part of a broader effort to strengthen Europe’s technological sovereignty. An external fund manager is expected to be appointed by January 2026.

The new public-private vehicle will focus on sectors deemed vital to Europe’s industrial and security interests, including robotics, biotech, clean energy, and advanced manufacturing. It comes amid mounting pressure to retain deep-tech talent and prevent strategic companies from relocating or being acquired by overseas buyers.

Recent transactions have underscored the challenge: US chipmaker AMD acquired Finnish AI firm Silo AI for $665m last year, while Apple purchased French artificial intelligence startup Datakalab in 2023.

“The Scale-Up Fund is a good first step, but even €5bn remains tiny compared to what’s happening globally,” said Andreas Schwarzenbrunner, General Partner at Speedinvest. “If AI, quantum, and other key technologies will define Europe’s future competitiveness, we need to spend an order of magnitude more.”

The initiative reflects growing alignment between EU policymakers and long-term investors seeking to close Europe’s late-stage funding gap and keep the continent competitive in next-generation technologies.

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