The new EIC Accelerator is around the corner. Announced as the largest deep technology fund in Europe, the EIC is expected to invest in EU start-ups and SMEs over a billion Euros this year and every other year between now and 2027. Companies can get financial support in the form of grants and equity for a total of up to 17.5 million Euros.
On March 3, the EIC has anticipated that the programme will be launched through an official ceremony taking place on March 18 and 19. The EIC work programme and the first calls for applicants are set to be released on the same days.
The launch event will officially present the framework the new EIC will adopt to allocate its funding this year. Over a billion Euros to be allotted to 300 Small and Medium-Sized Enterprises (SMEs) developing breakthrough technologies and game-changing innovations.
The evolution continues
The EIC Accelerator was first piloted in 2019-2020 as the evolution of SME Instrument Phase 2, the widely popular Horizon 2020 funding scheme specifically designed for EU SME tech champions. The Accelerator Pilot introduced new financial tools – the combination of grant and equity investments – together with a truly market-oriented set of investment policies, to help reduce the funding gap lamented by innovators in Europe.
While entering a few major changes, the new EIC Accelerator is expected to maintain those distinctive features that have made it so successful within the European innovation ecosystem:
- Investing in deep tech innovations. The EIC Accelerator remains Europe’s most ambitious and largest funding scheme supporting SMEs and start-ups developing high-impact innovations. In particular, the EIC Accelerator invests in innovations building on scientific discovery or technological breakthroughs (‘deep tech’) requiring significant funding to become economically sustainable.
- Offering grant and equity. The EIC Accelerator provides financial support in the form of blended finance, a unique combination of grant and equity. Beneficiaries can receive up to 2.5 million Euros in grants, plus an optional equity investment of up to 15 million Euros. Additional support is provided in the form of tailor-made Business Acceleration Services intended to connect companies with stakeholders and investors from all around Europe.
- Support for the close-to-market activities. The EIC Accelerator backs companies at late stages of technology development (at least Technology Readiness Level 5, e.g. technology validated in relevant environments) as well as organisations in the scale-up stage. Technologies at an earlier stage of development can receive financial support from the two other funding schemes under the EIC umbrella: Pathfinder (3-4 million Euros grant) and Transition (2.5 million Euros grant).
- Open to any type of innovation. The EIC Accelerator is open to companies developing innovations in any field of technology or industry. Applications are eligible from any EU Member State or Horizon Europe associated country.
- Gender balance. Support for women-led companies continues to be one of the EIC Accelerator’s top priorities. Up to 40% of the companies selected for the Jury interview are expected to have a female CEO.
What’s new in the fully-fledged EIC Accelerator
This year’s work programme will lay the foundations for the next 7 years introducing several changes in many aspects of the scheme, from the proposals submission and scoring system to the role of the Seal of Excellence.
What follows is a selection of the most significant changes according to the European funding experts at Alien Technology Transfer. It includes five key innovations that applicants need to consider when approaching the new EIC Accelerator.
1. Introducing the Strategic Challenges
Next to the open funding approach, the EIC will also launch calls for projects addressing specific technological challenges. The additional budget for such top-down calls comes from the NextGenerationEU, the stimulus package designed to boost the economic recovery and help build the post-COVID-19 Europe.
The challenges focus on the EU’s priorities for transitioning to a green, digital and healthy society and are expressly intended to foster the development of the EU’s industrial leadership in tomorrow’s strategic technologies.
Such an approach, already experimented in 2020 with the one-off Green Deal call, will become a key feature of the fully-fledged EIC Accelerator, with new Strategic Challenges to be announced every year. “Green Deal innovations for the economic recovery” and “Strategic Health and Digital Technologies” are the two Strategic Challenges expected in 2021 with an allocated budget of 507 million Euros.
Innovations related to batteries and new energy storage systems, technologies in green hydrogen production, and solutions contributing to the de-carbonisation of energy-intensive industries, are only a few of the technologies the EIC will look to fund under the “Green Deal” Strategic Challenge.
The “Strategic Health and Digital Technologies” call is expected to focus on, among others, AI-driven tools for early diagnosis, point-of-care diagnostics, and novel approaches in cell and gene therapy, in particular for cancer.
2. Catalysing VCs investments
The EIC Accelerator provides financial support in the form of blended finance, a formula where the grant component can be complemented by an equity investment from the EIC fund. The blended finance is expected to benefit especially companies involved in those R&D activities (deep tech development, hardware development, clinical trials) often considered too high-risk by traditional VCs. This way, the EIC aims at lowering the risk profile of complex, deep tech projects, eventually attracting new venture capital.
One of the main objectives of the new EIC is to establish strong cooperation with the EU private capital market, catalysing further investments in EIC-funded companies. The annual work programme sets the ambitious target of enabling private co-investments of 3-5 times the level of EIC funding. For this reason, both, the EIC Fund and the awarded SME are expected to actively scout for interested co-investors which should partially match the EIC’s funds.
3. A two-step application and three-step evaluation process
The new work programme introduces significant changes also in the submission process. The changes are intended to better manage the high number of applications and to ensure that the EIC brings forwards the most promising projects as quickly and smoothly as possible.
The application process will involve three steps:
- Short application. A five-page proposal accompanied by a video pitch and a slide deck, to be submitted at any time and evaluated on a first-come, first-served basis.
- Full application. If the short proposal is successful, companies will be invited to submit the full application. The full proposals will be evaluated by remote expert evaluators after specific deadlines set every year by the EIC. This year, only two submission deadlines are expected for the Accelerator: June 9, and October 6. The dates of the 2022 calls will be disclosed later this year.
- Interview. If the full application passes the remote expert evaluators’ assessment, companies will be invited to pitch their project in front of the EIC jury. This is the final step of the evaluation process. Applicants that succeed at the interview will negotiate the initial contract for the grant component and start the due diligence for the equity investment.
4. Two chances only
The new work programme sets a limit to the number of resubmissions. If rejected at the first attempt, applicants will be able to submit a significantly improved proposal at one of the following two cut-offs. However, a second rejection would force applicants to wait 12 months before submitting again a proposal for the same project. A second rejection of the full proposal will force companies to start the process again from the short application.
5. A new online tool for proposal drafting
The work programme introduces also a brand new application platform developed specifically for the EIC Accelerator. The tool is expected to replace the conventional EU Funding & Tender Portal. This system will adopt artificial intelligence to automatically calculate a qualitative score of the proposal. There is a lot of curiosity around the new tool, which should be used for both stages of the process (the short and full application) and be released as soon as the call is open.
Alien Technology Transfer has been monitoring the development of the new work programme for months. The firm’s European funding experts are already supporting tens of innovative companies to navigate the new EIC Accelerator, providing them with exclusive insights and a head start into the new programme.
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