Business Models for EIC Accelerator Applications (SME Instrument)

There are a great number of different business models available to choose from (i.e. marketplaces, product sales, SaaS, B2B, B2C, B2B2C, etc.) and the EU even lists business model innovations as a viable project type which can receive innovation financing.

Still, some business models are better than others but it is extremely dependant on the type of industry and product. In order to assure that a business model is suitable for the EIC Accelerator and is able to score high in the eyes of the evaluators, two main criteria must be regarded - scalability and profitability:

Scalability

Scalability is a key selling-point for the EU and it is directly asked for in the proposal template (see Scale-Up Potential) as well as in the Evaluation Criteria (see ESR Analysis). There are some business models which are easier to scale than others but it depends on the resources and personnel required to do so.

For example, an industrial and centralised hardware production where thousands of customers can be serviced from a single facility is easier to scale than a business model which requires a new facility to be set-up for each individual customer. Addressing scalability requires you to answer the question as to how the relationship between revenues and resource investments is.

• Does the scaling of your operations increase your profit margins?
• Is there a linear or exponential relationship between your profits and the number of customers?
• Can you create value in an automated fashion or does it include manual or labour-intensive actions?

Profitability

The second point to address when considering the business model is the profitability of your product or service. When talking about scalability, it usually refers to the number of customers, sales or deployments that will be reached but the impact of each individual deployment is as much of a determining factor as the number.

When choosing a business model, you must always consider a combination of profitability and scalability which will define what a deployment at scale looks like. If a single sale will provide €1m in revenues at a high profit margin then the scaling of customer numbers will not be as central to the project as for a product which generates only €1k per sale. General questions for the assessment of the profitability are:

• How many product deployments or customers would you require to reach €20m in annual revenues?
• Would a single customer be enough to cover your costs and allow you to continue technological developments?
• What is the price for competing offerings?

Conclusion

The descriptions above are just illustrative examples and by no means a complete assessment of what a business model should look like. It is possible to be scalable even if multiple facilities have to be set-up and it is also possible to have a profitable business model with a strong reliance on manual labour and personnel. Still, scalability and profitability must always be assessed in unison.

In this respect, the exact business model is far less important than the combination of scalability and profitability. An online platform for fashion products which generates revenues based on manual servicing of user requests (B2C) and affiliate marketing (B2B) can be both unscalable and unprofitable while the same business can be both scalable and profitable if they automate the B2C service while selling a more profitable B2B software for fashion-related design planning.

It should be highlighted that labels such as unprofitable and unscalable are seen from an EU or investors perspective and that this does not mean that the former example could not generate revenues and be profitable at the same time. The EU wants to support high impact projects which generate a multi-fold Return on Investment (ROI) from the initial grant and equity financing.

With the investments usually being above €1m, this would require the accumulated profits to be above €10m for the years following the market introduction of the fully developed technology. As such, the EU’s threshold for profitable and scalable is higher than what is actually needed in most businesses, thus the EU's strong focus on disruptive innovations and the creation of new markets.

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 listed below. 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. Switzerland has resumed its participation in Horizon Europe and is now eligible for the EIC Accelerator.

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Eureka Network: The Eureka Network delivers various international collaborative R&D initiatives such as Network Projects, Clusters, Eurostars, Globalstars, and Innowwide, providing funding from €50K to €6.75M per project based on the specific initiative. This network emphasizes market-driven innovation and deep-tech advancement across multiple technology sectors including ICT/Digital, Industrial/Manufacturing, Bio/Medical Technologies, Energy/Environment, Quantum, AI, and Circular Economy. Eligible participants include SMEs, large enterprises, research organizations, universities, and startups, with Eurostars particularly focused on R&D-performing SMEs. Get Started

EIC Transition: EIC Transition delivers up to €2.5 million in funding to overcome the 'valley of death' gap between laboratory research and market deployment, emphasizing technology maturation and validation. The initiative supports single legal entities or small consortia of 2-5 partners including SMEs, start-ups, spin-offs, and research organizations. Key technology domains include Health/Medical Technologies, Green/Environmental Innovation, Digital/Microelectronics, Quantum Technologies, and AI/Robotics. Get Started

EIC STEP Scale-Up: EIC STEP Scale-Up delivers significant equity investments of €10-30 million for established deep-tech companies prepared for hyper-growth and large-scale expansion. The initiative targets SMEs or small mid-caps with up to 499 employees who have obtained pre-commitment from qualified investors. Primary focus areas include Digital & Deep Tech (Semiconductors, AI, Quantum), Clean Technologies for Net-Zero objectives, and Biotechnologies. Get Started

EIC Pre-Accelerator: EIC Pre-Accelerator represents a 2025 pilot initiative delivering €300,000-€500,000 in funding for early-stage deep-tech development and preparation for the EIC Accelerator program. This program is exclusively accessible to single SMEs or small mid-caps from 'Widening countries' to foster regional innovation development. The initiative encompasses deep-tech innovations across physical, biological, and digital domains. Get Started

EIC Pathfinder: EIC Pathfinder delivers up to €3 million for Open calls and up to €4 million for Challenge-based calls to support early-stage research and development with proof-of-principle validation. The initiative requires research consortia with a minimum of 3 partners from 3 different countries, including universities, research organizations, and SMEs. Primary technology focus areas include Health/Medical, Quantum Technologies, AI, Environmental/Energy, and Advanced Materials. Get Started

EIC Accelerator: EIC Accelerator delivers flexible funding options including blended finance (€2.5M grant + €0.5M-€10M equity), grant-only (up to €2.5M), or equity-only arrangements for scale-up and market deployment of breakthrough innovations. The initiative targets SMEs, start-ups, and small mid-caps with up to 499 employees, with MedTech/Healthcare representing 35% of funded projects. Additional technology areas include Biopharma, Energy, AI, Quantum, Aerospace, Advanced Materials, and Semiconductors. Get Started

Innovation Partnership: Innovation Partnership enables collaborative innovation between public and private sectors with typical funding of €1-5 million per project. The initiative supports cross-sectoral strategic technologies through public-private partnerships and consortia. Projects concentrate on addressing societal challenges through collaborative innovation approaches. Get Started

Innovation Fund: The EU Innovation Fund delivers substantial funding of €7.5 million to €300 million for large-scale demonstration of innovative low-carbon technologies. The initiative targets clean energy, carbon capture, renewable energy, and energy storage technologies to accelerate the transition to a low-carbon economy. Eligible participants include large companies, consortia, and public entities capable of implementing large-scale demonstration projects. Get Started

Innovate UK: Innovate UK delivers various programs with funding ranging from £25K to £10M depending on the specific initiative, supporting business-led innovation, collaborative R&D, and knowledge transfer. The organization funds projects across all sectors with particular emphasis on emerging technologies and supports UK-based businesses, research organizations, and universities. Programs are designed to drive economic growth through innovation and technology commercialization. Get Started

Industrial Partnership: Industrial Partnership delivers €2-10 million in funding for industrial research and innovation partnerships focusing on manufacturing, industrial technologies, and digital transformation. The initiative supports industrial consortia and research organizations in developing collaborative solutions for industrial challenges. Projects aim to strengthen European industrial competitiveness through strategic partnerships. Get Started

Eurostars: Eurostars represents a joint EU-Eureka initiative delivering €50K-€500K for international R&D collaboration specifically led by SMEs. The program adopts a bottom-up approach, accepting projects from all technology fields without predefined thematic restrictions. R&D-performing SMEs must lead the consortium and demonstrate significant R&D activities. Get Started

LIFE Programme: The LIFE Programme delivers €1-10 million in funding for environmental protection, climate action, and nature conservation projects across the European Union. The initiative supports environmental technologies, climate adaptation strategies, and biodiversity conservation initiatives. Eligible participants include public authorities, private companies, NGOs, and research institutions working on environmental and climate challenges. Get Started

Neotec: Neotec represents a Spanish initiative delivering €250K-€1M in funding for technology-based business creation and development, supporting the growth of innovative Spanish SMEs and start-ups. The program covers all technology sectors and aims to strengthen Spain's technology ecosystem. Funding is specifically targeted at Spanish technology-based SMEs and start-ups to enhance their competitiveness and market presence. Get Started

Thematic Priorities: EU Thematic Priorities encompass various programs aligned with EU strategic priorities including green transition, digital transformation, health, and security initiatives. Funding amounts vary based on the specific program and call requirements, with projects designed to address key European challenges. Applicant eligibility varies by specific program and call, with different requirements for different thematic areas. Get Started

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