Europe has a well-documented problem with its most promising tech companies: it creates them, but struggles to keep them. Since 2000, only six out of fourteen Danish-founded unicorns have remained in Denmark or elsewhere in Europe. The other eight moved abroad, with the vast majority heading to the United States in search of the late-stage funding that remains scarce on the continent. This pattern is not limited to Denmark; it reflects a structural weakness in European capital markets that has cost the region some of its most valuable homegrown technology champions.
The Scaleup Europe Fund: a €5 billion answer
A new initiative hopes to change that trajectory. The Scaleup Europe Fund, a €5 billion vehicle managed by the Swedish investment firm EQT, has secured a €200 million commitment from EIFO, Denmark’s national promotional bank and export credit agency. EIFO is the only state-backed anchor investor in the fund, which sits under the umbrella of the European Innovation Council (EIC) Fund. The European Commission is also a founding investor, committing €1 billion — the largest single pledge — and participating on equal terms with private investors, with corresponding representation in the fund’s governance. Other founding investors include Novo Holdings, Allianz, APG Asset Management (managing assets for the Dutch pension fund ABP), Spain’s CriteriaCaixa and Santander, and several Italian foundations, among them Fondazione Compagnia San Paolo, Intesa Sanpaolo, and Fondazione Cariplo. The mix is deliberate: the fund is designed to be pan-European rather than tied to a single country’s interests.
EQT, which managed €269 billion in assets as of March 31, 2026, plans to invest in 30 to 40 promising European growth-stage tech companies. The first investment is expected in autumn 2026, with a further fundraising round planned for the second half of the year to allow more investors to join while maintaining a strong European focus.
Why Europe keeps losing its top companies
The fund’s creation is a direct response to what is often called Europe’s “scaleup gap” — a shortage of capital for companies beyond Series B or C. European startups routinely raise enough to prove their concepts and scale modestly, but when they need more than €100 million to compete globally, the options dry up. Since 2019, US buyers have acquired almost $24 billion worth of European spinouts, more than local buyers. The funding shortfall forces companies either to slow their growth or to seek capital abroad — and that often means relocating the company itself.
Two high-profile examples illustrate the cost. DeepMind, the London-based artificial intelligence pioneer, was sold to Google in 2014 for approximately £400 million ($650 million) — a price Google’s former CFO later called “a steal”. ARM Holdings, the British chip designer, was acquired by Japan’s SoftBank in 2016 for £24.3 billion ($32 billion). Both companies were built on European talent and technology, but the capital needed to keep them independent and scaling in Europe was not available. The Scaleup Europe Fund aims to ensure that the next generation of such companies — operating in artificial intelligence, quantum technology, robotics, energy tech, space, biotech, medtech, and agritech — can access the late-stage funding they need without leaving the continent.
To put the scale of the problem in context, the US venture capital market routinely invests sums in a single quarter that dwarf Europe’s entire late-stage ecosystem. US investors tend to offer larger checks, faster decisions, and higher valuations, though they often demand greater ownership. European venture capital has historically been more cautious, with smaller, more patient rounds and a greater reliance on public co-investment. Europe leads in sectors such as climate tech and deep tech, but the US dominates AI and consumer markets. The Scaleup Europe Fund is not trying to match the sheer volume of US investment; its target is to give European companies a genuine choice to grow at home. Notably, in 2025, private equity and venture capital firms based in EU member states increased their investment in local AI companies by 83.3% year on year to $6.8 billion, signalling growing domestic appetite, but some European AI leaders still seek US capital for later-stage rounds.
EIFO’s strategic hand in shaping the fund
EIFO’s involvement goes deeper than its €200 million cheque. Over the past year, the Danish institution helped design the fund, led the process to select EQT as manager, and set the investment criteria. The aim was to ensure commercial viability from the outset, rather than having policy goals retrofitted later. Peder Lundquist, EIFO’s chief executive, described the commitment as a reflection of “a structural problem that has cost Europe dearly”. He added: “Europe clearly needs stronger capital in the later growth stages if we are to retain our most promising companies on the continent. With the Scaleup Europe Fund, we are helping address a critical gap and ensuring that more of these companies stay in Denmark and Europe.”
Erik Balck Sørensen, EIFO’s chief investment officer, underscored the commercial logic: “We have been closely involved in shaping the fund’s framework, and it has been essential for us to ensure a commercially viable model that can attract the strongest European companies. At the same time, we’ve had a clear focus on ensuring the fund also benefits Denmark. We’re therefore pleased that it targets several areas of Danish strength.” He said he expects one or more Danish companies to receive support from the fund. EIFO’s broader strategy — focused on technology, life sciences, and green energy, with a commercial mindset — has yielded returns: in 2025 the bank reported a profit of DKK 1.8 billion, driven significantly by equity investments and a major life science exit from Evosep. EIFO also operates a “Match Loan” scheme that matches private investment in early-stage Danish companies on a 1:1 basis, sharing risk and increasing investors’ firepower.
EQT’s track record and expectations
EQT brings substantial experience to the table. Its venture arm, EQT Ventures, has backed more than 140 founding teams and helped build unicorns including Wolt, Einride, Handshake, Nothing, and Sana. The Scaleup Europe Fund will focus on later-stage companies from Series B onwards, with investment sizes far exceeding EQT Ventures’ usual range of €1 million to €50 million. EQT will also draw on its AI-driven deal sourcing platform, Motherbrain, and its network of industrial advisors. Christian Sinding, who chairs the fund’s investment committee, stepped down as EQT’s CEO and managing partner in May 2025 after overseeing the firm’s public listing and significant growth. He said: “Europe has the talent, the technology and the ambition to produce the next generation of global tech leaders. What has been missing is the capital and conviction to back them at scale and speed. With the Scaleup Europe Fund, we are here to change that.”
The EIC Fund, established in 2020 with a budget of over €3.5 billion, provides the overarching framework, but the Scaleup Europe Fund is managed independently by EQT to ensure market-based decisions. Broader EU initiatives such as VentureEU — a fund-of-funds aimed at increasing venture capital availability — and the InvestEU programme, which leverages private investment for policy priorities, have sought to address the funding gap, but the Scaleup Europe Fund is the most ambitious effort yet focused squarely on late-stage growth.
It is fair to ask whether €5 billion can truly alter the dynamics of European late-stage funding. The US venture market often deploys more than that in a single quarter, and public-private funds can struggle when political considerations intrude. But the Scaleup Europe Fund is not trying to outspend America. Its goal is more specific: to make sure the next Spotify, Klarna, or Zendesk can choose to grow in Europe. Right now, many companies don’t have that choice.
