Europe's top tech investors feature major public entities, contrasting with the US's private investor-led landscape
New EPO study helps assess the size of the funding gap for European startups
Tech startups hold significant potential to drive innovation and progress. They also present unique challenges that only investors with expertise in IP are well-equipped to tackle effectively. A new report published today by the European Patent Office (EPO) sheds light on the investors who are vital for the successful commercialisation of cutting-edge inventions. The report shows that tech investment in Europe is primarily driven by major public programmes and specialised private investors, revealing a funding gap compared to the US.
"Startups play a crucial role in commercialising disruptive ideas with great potential to drive progress. However, as highlighted in Mario Draghi’s report, many innovative companies face financial obstacles to grow within Europe,” said EPO President, António Campinos. “This funding gap hinders the transformation of innovation into scalable startups, driving entrepreneurs to seek opportunities abroad. Bridging this gap is crucial to revitalising sustainable growth across Europe."
The report introduces a new metric, the Technology Investor Score (TIS), which measures the percentage of companies in an investor's portfolio that have filed patent applications. Leveraging this metric designed to identify investors specialising in tech, the study reveals that 88% of European investors have portfolios including companies with patents. In addition, 8% have portfolios with more than half of their companies holding patents, demonstrating a particularly strong engagement with patenting startups.
The top 5 most central investors in Europe’s network of co-investors are major public entities specialising in technology funding. These are the European Innovation Council (EIC), Innovate UK, Eurostars SME Programme, Bpifrance, the European Institute of Innovation and Technology (EIT). The top 100 also features pan-European public institutions such as the European Investment Bank (EIB) and other national innovation agencies. Among private investors in the top 100 most central positions, 62% focus on early-stage funding, while only 22% specialise in late-stage funding, underscoring the limited capital available in Europe for scaling up technologies and bringing inventions to market. In contrast, private investors account for 98 of the top 100 most central investors in the US network of co-investors, with over half specialising in late-stage companies, reflecting stronger private support for scaling high-tech companies.
The UK, France, and Germany lead in total funding and number of transactions, with a strong investor presence in tech. Together, these three countries accounted for a total of approximately 75 800 transactions, with total funding amounting to around €392 billion from 2000 to 2023, supported by some 6 100 investors with a portfolio of at least ten companies operating across the three countries. The Netherlands, Switzerland, Norway, Sweden, and Belgium also show high levels of patent-backed investment, with over 24 400 accumulated transactions and almost €88.5 billion in the same period. Other European countries taken together account for a total of more than 22 000 transactions, with total funding of more than €70 billion. All of this demonstrates promising growth potential in tech specialisation.
Addressing Europe's startup financing challenges
The comprehensive mapping of tech investors provided in the study is part of the EPO’s wider effort to support SMEs and startups in Europe. As a complement to the study, the EPO’s Deep Tech Finder has been updated with a new filter for discovering investors. This will help startups find the most suitable investors for their specific company profile based on criteria such as type of round, country or technology field. This update expands the functionalities of the Deep Tech Finder, a free tool which already enables users to easily find more than 10 000 European startups, spin-outs and universities with patent applications at the EPO.
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