How Deep Is Your Tech? The European Innovation Council Impact Report (EIC Accelerator)

The European Commission (EC) and European Innovation Council (EIC) provide €2.5 million in grants and €15 million in venture financing per startup or Small- and Medium-Sized Enterprise (SME).

This article discusses highlights from the 2022 impact report on the new EIC Accelerator program (grant and equity, with blended financing option).

1. The EIC Fund’s Mission

“In 2022, the EIC made a major development by establishing the EIC Fund as an investment vehicle for high risk, high-potential startups in their early stages of development.”

The EIC Fund is a great addition to the EIC’s portfolio of funding arms since it enables larger funding amounts and closer relationships with companies through ownership stakes, deep due diligence and board seats.

Unfortunately, it is currently not aligned with the needs of high-risk and early-stage startups due to many delays, a long backlog of unfunded companies spanning multiple years into the past and a distorted selection process that often abandons the idea of DeepTech (see Breaking the Rules).

2. Industries and the EIC’s Role

“Whether it’s the energy crisis, the food crisis, or the path towards economic resilience, the EIC is helping to find solutions to these deep societal challenges by identifying investment opportunities and catalysing private investments in deep tech startups that can scale in global markets.”

It is clear that many of the EIC Accelerator portfolio companies focus on very technical fields in the areas of health, energy, computing, space technology and others, often including hardware developments. This is a great accomplishment since pure software companies would be less risky and easier to scale in comparison.

Still, it remains to be seen if the EIC is crowding-in private investments or if private investors are crowding-in the EIC.

There are cases in which companies raised substantial capital before or during the EIC Accelerator approval process so it is likely that the EIC is pursuing a safe strategy of piggybacking on private markets while also following a risky approach of betting on disruptive technologies in parallel.

This is, of course, a very reasonable approach since disruptive DeepTech is too risky to be the exclusive priority of any investment vehicle, including the EIC.

While it is easier for the EIC to advertise results from EIC Pathfinder and EIC Transition due to the filing of patents and the publications of scientific papers, the EIC can only advertise results from the EIC Accelerator through valuations, scaling and revenues which are difficult to achieve (see The EIC Portfolio).

This places a major burden on the EIC since obtaining financial success cases is extremely difficult and creates distorted incentives where the evaluation prefers companies that are already successful rather than those that will (potentially) be. It also requires a near-unreasonable level of risk mitigation from companies that are expected to have signed contracts with major industry stakeholders or customers even at TRL5.

3. Stealing Thunder

“To date, the EIC has supported a portfolio of over 1 600 startups that have helped generate 12 deep tech Unicorns and 112 Centaurs here in Europe. EIC companies have attracted over EUR 10 bn of follow on investment and the valuation of the EIC portfolio of companies stands at over EUR 40 bn.”

Interestingly, the EIC lists a company called TWAICE as an example of a centaur but this is quite deceptive since, according to Crunchbase and public data, the company raised $30 million before obtaining EIC funding and no funding afterward. This would suggest that their valuation had already reached the centaur status, potentially exceeding the status of an SME, while the EIC support had little or no effect.

This casts doubt on the EIC’s unicorn or centaur claims and a thorough investigation of the EIC’s role in their growth and success is warranted.

4. Diversity

“The EIC also continues to outperform the market in supporting women-led companies and entrepreneurs from all regions of the EU – factors essential for a balanced and diverse innovation chain better addressing the needs and reflecting capabilities of our citizens.”

It is quite clear that the EU member states and associated countries are not equally represented in the portfolio of EIC-funded companies. Of course, this is not avoidable since different countries have varying startup ecosystems and low-GDP countries will generally struggle to create cutting-edge DeepTech startups.

Diversity goals, including gender targets, are generally driven by political agendas and it remains to be seen if such goals, as they are applied to technology investments, will have a positive impact on all citizens in the long term.

5. No Country for Old Companies

There is a preference for companies within a certain age range whereas the majority of funded businesses are 6-10 years old and a total of 50% of companies are below 10 years of age. This, of course, can stem from the fact that many older businesses are not incentivized to innovate while it is often startups that are in a position to disrupt industries with ground-breaking technologies.

6. Congesting Innovation

“The first EUR 260 m in investments through the EIC Fund has resulted in 92 investment agreements. 48 investments by the EIC Fund have been sufficiently mature to leverage just under EUR 500 m in co-investments by private and other funds, resulting in a leverage of 2.6 times the value of the EIC Fund equity investments. 2022 also saw the largest investment round involving the EIC Fund: a EUR 100 m fundraising round by SiPearl. 44 investment agreements signed by the EIC Fund have taken the form of convertible loans. These act as a bridge to the next fundraising round, which is expected to fall within 12-18 months of receiving EIC support.”

It is no secret that the EIC Fund has had a difficult past (see An Inside Look). Confusion and disappointment among beneficiaries as well as delays in the issuance of funds are still plaguing startups even 4 years later.

Most companies are still waiting to receive their equity investments and the EIC is still making structural changes to the fund which will likely lead to more delays – i.e. handing the EIC Fund to the European Investment Bank (EIB).

“Since September 2022 it has been fully functional and is in the process of taking investment decisions on 179 companies selected by the EIC Accelerator for equity support in 2021 and 2022.”

It is likely that the EIC Accelerator will undergo substantial changes over the coming years which will reshape the evaluation process and especially the selection procedure.

Considering the current evaluation process, the EIC is putting the cart before the horse by performing the due diligence on a company after the funding decision has already been made.

While the EIC Fund can still decide not to invest in a company, it is not how the program was intended to function.

Currently, a subjective assessment process using conflicting criteria in 3 steps screens companies while final investment decisions are made based on a 35-minute interview. Only then will months of due diligence be performed. This is, of course, highly uncommon in the investment industry.

7. Turtles Investing In Hares

“Operational Excellence: Including time from application to grant for Accelerator, 6 months for Transition, and 8 months for Pathfinder”

Days-to-Grant by Program

2021 2020
EIC Accelerator 300 152
EIC Transition 91
EIC Pathfinder 167 207
Due Diligence* >720 180-360


The statistics on the application durations are quite revealing since they suggest that the average beneficiary was rejected at least once in the process. For a company applying to the EIC Accelerator, it is possible to move from the beginning of Step 1 to the final funding decision in Step 3 within 6 months if no rejections are received. Afterward, 2+ months can be expected to access the funding.

Since the average duration given by the EIC is 300 days or 10 months (100% higher than in 2020), it seems that either the projects are rejected before obtaining funding, applicants skip deadlines due to the higher workload or the EIC caused substantial delays in the issuance of the financing.

Still, it is unclear what this timeline actually represents since it does not clarify the start and end points (i.e. Step 1, Step 2, Step 3, money in the bank).

But it is possible that the numbers reflect rejections faced by beneficiaries which highlights the inaccuracy of the evaluation process and the persistent luck factor of obtaining funding.

This article was last modified on May 1, 2023 @ 19:40

These tips are not only useful for European startups, professional writers, consultants and Small and Medium-Sized Enterprises (SME) but are generally recommended when writing a business plan or investor documents.

Deadlines: Post-Horizon 2020, the EIC Accelerator accepts Step 1 submissions now while the deadlines for the full applications (Step 2) under Horizon Europe are:

  • Step 1 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

The Step 1 applications must be submitted weeks in advance of Step 2. The next EIC Accelerator cut-off for Step 2 (full proposal) can be found here. After Brexit, UK companies can still apply to the EIC Accelerator under Horizon Europe albeit with non-dilutive grant applications only - thereby excluding equity-financing.

Contact: You can reach out to us via this contact form to work with a professional consultant.

EU, UK & US Startups: Alternative financing options for EU, UK and US innovation startups are the EIC Pathfinder (combining Future and Emerging Technologies - FET Open & FET Proactive) with €4M per project, Thematic Priorities, European Innovation Partnerships (EIP), Innovate UK with £3M (for UK-companies only) as well as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants with $1M (for US-companies only).

Any more questions? View the Frequently Asked Questions (FAQ) section.

Want to see all articles? They can be found here.

For Updates: Join this Newsletter!

by Stephan Segler, PhD
Professional Grant Consultant at Segler Consulting

General information on the EIC Accelerator template, professional grant writing and how to prepare a successful application can be found in the following articles:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)