ETCI 2: Europe Aims to Mobilize €80 Billion for Tech Scale-Ups

Europe is trying again to build a serious growth-capital machine for its tech companies. The European Tech Champions Initiative’s second round, known as ETCI 2, is aiming to channel up to €80 billion into more than 1,500 European scale-ups. A spokeswoman for the European Investment Bank confirmed to Handelsblatt that fundraising is in its final stretch, with the first formal close expected before year-end. After that, the money can start moving, even though the fund will still be open to more commitments.

The engine here is a fund of funds with a target size of up to €15 billion. That is roughly four times the size of the predecessor. The European Investment Bank Group is putting in up to €1.25 billion, and the initiative has backing from all 27 EU member states. Private names are in the mix too: Danske Bank, Banco Santander, BBVA, AltamarCAM, Azimut, Green Arrow Capital and the Compagnia di San Paolo foundation.

This is not a direct startup fund. It backs more than 100 growth funds instead, including as many as 45 mega-funds with more than €1 billion each. For the first time, mid-sized funds of €300 million or more can also qualify. The average ticket per company is expected to be about €200 million, which tells you exactly what stage Brussels and Luxembourg are targeting: the awkward, expensive stretch between promising startup and full-scale public company.

The focus is on highly innovative firms in growth mode, especially in AI and deep tech, life sciences, security and space, fintech and clean tech. There is also a separate investment platform for pension funds, insurers, foundations, family offices and banks, designed to make it easier for them to place money into European tech funds. The point is simple enough: more private capital, fewer excuses to go overseas when the rounds get large.

ETCI 1, launched in 2023, raised €3.9 billion, including about €1 billion from Germany. It backed 15 mega-funds and, according to the EIB, helped produce 12 EU-based unicorns. One example is Exein, the Rome cybersecurity company that recently closed a round with ETCI participation at a $1.7 billion valuation, or about €1.5 billion. ETCI 2 is meant to build on that, while fitting alongside national efforts such as France’s Tibi initiative, Germany’s WIN initiative and the European Commission’s Scaleup Europe Fund.