The United Kingdom (UK) has officially left the European Union (EU) in February 2020 but their future relationship concerning EU funding programs has been a mystery thus far. Under Horizon 2020, the UK was largely able to participate in funding programs as could all EU-27 and third-country applicants with some minor exceptions. When participating in the EIC Accelerator blended financing program (formerly SME Instrument Phase 2, grant and equity financing), UK applicants were ineligible for equity investments by the EIC fund (read: Pre-Requisites for an Application).
This was due to the prohibition of any investments by the European Investment Bank (EIB) and the European Innovation Council (EIC) Fund in UK companies which would have otherwise been eligible for up to €15M per project in equity-financing (i.e. in addition to the €2.5M grant the UK was still eligible for) (read: Equity Financing under the EIC Accelerator).
It has now been confirmed that this situation will continue in 2021 under Horizon Europe (2021-2027) whereas UK companies can apply for grant- (i.e. €2.5M) but not for equity-financing (i.e. €15M). This has been reported by Science Business and was confirmed by the UK government through an explicit declaration which states:
“The United Kingdom and United Kingdom entities shall not participate in the European Innovation Council (EIC) Fund established under Horizon Europe.”
While access to €2.5M in non-dilutive grant financing is still an exceptional opportunity for UK startups and Small- and Medium-Sized Enterprises (SME), being excluded from the equity financing can present a barrier for future EIC Accelerator applicants from the UK. To counteract this limitation, it can be useful for such companies to establish EU subsidiaries or parent companies (i.e. in Ireland) which can be used for future applications to re-gain access to equity funding via the EIC Fund and the EIB.
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) will be on June 16th 2021 and October 6th 2021 under Horizon Europe. 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).
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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:
- EIC Accelerator Interviews: Pitch Deck vs. Proposal Documents (SME Instrument)
- Choosing a Good Project for the EIC Accelerator (SME Instrument Phase 2)
- The EIC Accelerator Budget: Grant vs. Blended Finance (SME Instrument Phase 2)
- EIC Accelerator – Introduction and Blended Finance (SME Instrument Phase 2)
- EIC-Accelerator Writing: Providing the Missing Link (SME Instrument Phase 2)
- The Biggest Mistakes When Applying to the EIC Accelerator (SME Instrument Phase 2)
- Identifying a Broad Vision for an EIC Accelerator Project (SME Instrument Phase 2)