Europe needs more capital for start-ups
The European Patent Office (EPO) has published a comprehensive study on the innovation ecosystem, which shows that funding gaps are hindering the growth of European start-ups. A new key figure, the Technology Investor Score, helps technology-orientated companies to identify suitable investors. In addition, an update of the Deep Tech Finder expands the targeted search for investors and thus strengthens European competitiveness.
Europe’s economic strength depends to a large extent on technological innovation. However, access to capital remains a challenge for many start-ups in the growth phase. The new study “Mapping investors for European innovators”, published by the EPO’s Patent and Technology Observatory, shows that private and public investors play a crucial role in promoting new technologies. Compared to the USA, however, there is a lack of capital in Europe for later financing phases, which hinders the growth of innovative companies.
Technology Investor Score as a guide
To make it easier for technology-oriented companies to find investors, the EPO is introducing the Technology Investor Score. This new indicator shows the proportion of companies with patent applications in an investor’s portfolio. The TIS helps start-ups to identify suitable partners and promotes targeted investment in technological innovations.
The study analysed over 6100 investors in Europe and 8000 investors in the USA and shows that 88% of European investors have companies with patents in their portfolio. However, only 8% of these investors focus primarily on start-ups with patents. A clear sign of restrained capital flows into innovative growth companies.
Europe needs to invest in scaling
A key problem in the European innovation ecosystem is insufficient funding in the late stages of development. While public investors such as the European Innovation Council, the European Investment Bank or national innovation agencies strongly support early-stage financing, there is a lack of private investors for scalable start-ups in Europe.
The analysis shows that 62% of the 100 largest European private investors focus on early-stage financing, while only 22% invest in later stages. In comparison, 98 of the top 100 investors in the US are private investors, of which more than half invest specifically in scaling start-ups. This funding gap in Europe means that promising technology companies are moving abroad to find better conditions for growth.
Targeted solutions for more access to capital
To overcome these challenges, the EPO has added a new filter function to its Deep Tech Finder. The free online tool enables start-ups to conduct a targeted search for investors based on criteria such as financing phase, location and technology focus. This enables technology-driven companies to efficiently find investors who specialise in their specific needs.
In addition, the Observatory for Patents and Technology offers a new information platform that provides detailed insights into financing strategies, investor profiles and the use of patents to raise capital. The aim is to support start-ups and SMEs so that they can realise their full innovation potential.
Strengthening Europe’s innovative power
The results of the study underline the need to optimise financing structures in Europe. Public funding alone is not enough to ensure the transition from idea to market maturity. More private capital is needed for later growth phases in order to keep innovative companies in Europe and remain competitive in the long term.