European Commission Bets On Vibe Coding, Scaleup Europe Fund and EIC Accelerator Equity
Here are some updates regarding EIC grants and the Scaleup Europe Fund.
EIC Accelerator Equity
Since many business influencers have started advertising the EIC Accelerator to spread the word about "zero-equity" seed funding, here is my take on how applicants should view this.
The EIC wants VCs to be part of the funding story, not replace them.
If a company asks for a grant and does not want to request equity from the EIC, it should still explain how it plans to attract enough funding to scale. In DeepTech, this is usually from VCs but can also be from other sources.
If it requests equity from the EIC Fund as well, then having VCs or other co-investors on board is also a must.
"We are not talking to VCs at all" or "we don't want VC funding" is usually a red flag for EIC Accelerator applicants.
European Sovereignty Through... Vibe Coding?
The European Commission, with the support of the European Innovation Council, has created the Scaleup Europe Fund to help European companies raise late-stage capital in €100+ million rounds while ensuring European sovereignty.
The funding focuses on European businesses in strategically important industries, with the same mission as the EIC Fund: to crowd in private capital.
The target is to take €1 billion from the EIC budget (2026/27) and scale it up to €5 billion through private investors.
The fund became operational this month and has already announced two major funding rounds:
First, the Finnish satellite operator ICEYE raised a €1 billion Series F.
Second, the Swedish "vibe coding" app Lovable raised a $400 million Series C.
The second case is shocking for a variety of reasons, but most importantly because the company is based in the US through its Delaware holding company and not in the EU, despite operations being in Sweden.
VibeTech Investing
I will soon post a video and article on the topic, but here is my take on this.
I do not believe that Lovable, while it is clearly a great business and a company that should be supported as a European tech winner, is of strategic importance to Europe.
It is not developing its own foundation models, not addressing infrastructure (i.e., data centers), nor solving any of the urgent issues that make Europe fall further behind (i.e., energy costs, raw materials, supply-chain dependency, etc.).
As a US entity, it should also not be eligible for funding, as this would go against the fund's legal text.
Lovable is not a significant employer, with just a few hundred employees, and there is no risk of relocation since this has already happened.
Also, as a smaller investor, it is unlikely that the EIC's contribution would have enough leverage to block any merger, acquisition, or relocation, even with partial ownership.
The only reason I can see for an investment would be to block a US acquisition or listing. But even if the EC were able to negotiate that, which is highly doubtful, considering the financial disincentives for the co-investors, for what purpose?
It is not of strategic value anyway.
Lastly, reports on the funding round indicated that the initial $300 million rose to a final $400 million, suggesting that the Series C was oversubscribed, thereby casting even more doubt on the need for public funding.
Overreaction
Here is my take on this story: I believe that the failures of Lilium and Northvolt have hurt Europe and especially the politicians who had to answer for them.
This fund is supposed to avoid history repeating itself. And it is a very good idea.
But the second investment in Lovable within days of the fund's launch tells me two things:
The private asset manager already had the deal lined up before the fund was even ready.
The capital was impatient, and there must have been political pressure to make the funding flow regardless of the mission alignment.
In my estimation, the goal of the Scaleup Europe Fund, helping strategically important and DeepTech businesses raise late-stage funding with EIC capital, has been turned on its head.
Rather than the European Commission crowding in private investors to further its agenda, private investors have crowded in European funding to further their own.
Prepare Your Application
Need help with the EIC Accelerator or other grants? Here are some options:
- Starter Pack (lowest-risk entry via AI writer ChatEIC and content)
- Advisory (personalized guidance to help you write)
- Co-Writing (full proposal writing with continuous client alignment)
- Writing (complete end-to-end service, including writing and submission)
- Review (personal proposal review by an expert)
Other resources:
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.
EIC Accelerator Step 1 Deadline 2025
Contact: You can reach out to us via this contact form to work with a professional consultant.
AI Grant Writer: ChatEIC is a fully automated EIC Accelerator grant proposal writer: Get it here.
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. Technology areas include Biotech, Engineering, Artificial Intelligence, Energy, Quantum, Aerospace, Advanced Materials, and Semiconductors. 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 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 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 Advanced Innovation Challenges: EIC Advanced Innovation Challenges represents a new pilot initiative delivering €300,000 (Stage 1) and up to €2.5 million (Stage 2) for breakthrough deep-tech innovations through ARPA-style staged funding mechanisms with integrated demand-side engagement. This initiative targets single entities or small consortia (2-3 partners) including SMEs, start-ups, and research organizations. Primary focus areas include Physical AI for autonomous robotics applications and New Approach Methodologies (NAMs) for animal-free biomedical testing, with TRL 4 entry requirements and demonstrated end-user commitment. Get Started
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
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
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
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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