Leaked Horizon Europe papers give an early insight into new types of EU funding for start-ups and SMEs under the EU’s 9th Framework Programme (FP) for Research and Innovation. While Horizon Europe has yet to be officially launched in June 2021, the innovation community is getting ready for novel types of EU funding to accelerate the commercialisation of innovation. The European Innovation Council’s new Accelerator scheme, in particular, raises high expectations. Compared to the initial pilot, the EIC Accelerator is will offer a simplified application process, blended finance as standard, limited re-admission and a clearly defined target audience, i.e. start-ups and SMEs with high-impact innovation. While all this has yet to be finalized, EFMC is tailoring its proposal writing training to a concise one-day seminar for deep-tech, disruptive start-ups and SMEs.
What makes the new EIC Accelerator so special?
The EIC Accelerator is a new EU funding instrument for start-ups and SMEs designed to help them scale up high-impact innovation with the potential to disrupt existing and/or create new markets. This phase in the innovation lifecycle is notoriously difficult, as expressions such as the “valley of death” suggest. That’s why the EIC Accelerator is specifically tailored to deep-tech start-ups and SMEs. These are companies ready to scale up innovative products, services or business models that are based on technology breakthroughs.
This makes investing in these companies a risky business, with the resulting lack of finance slowing down commercialisation. The EIC Accelerator aims to bridge this funding gap by offering blended finance. This means that successful applicants under the instrument could be eligible for an EU grant of up to 2.5 M€ combined with “patient” equity of up to 15 M€. This investment is intended to finance the scale-up and market entry, a high-risk phase that traditional investors tend to avoid. Being “patient”, this type of equity tolerates a later exit compared to what commercial equity investors usually expect. But there is more than that to the new EIC Accelerator.
Expected new Features of the EIC Accelerator in Horizon Europe
According to the leaked draft EIC Work Programme 2021 that is circulating, the new Accelerator will build on the lessons learned from a two-year pilot phase. This has implications for the application process, the number of re-admissions and the specific target audience and the type of calls:
- Tailored to SMEs with breakthrough innovation: The EIC Accelerator is limited to a specific sub-set of SMEs developing disruptive technologies, services and business models. Typically, they will have completed technology readiness level TLR 5, with the Accelerator funding addressing TLR 6 to TLR 9.
- Blended funding will be standard: The combination of an EU grant of up to 2.5 M€ and equity finance or guarantee of up to 15 M€ offers an exit horizon of 7-10 years. The EU grant only option will be limited to SMEs that demonstrate they can cover the TRL9 phase from their own resources.
- Simplified application process: Instead of asking SMEs to submit a full 30-page application with business plan, finances and company structure, there will be a simpler preliminary process. This involves a short application on a 5-page form, a pitch-deck of up to 10 slides and a 3-minute video pitch. Only applicants receiving the GO from expert evaluators in this phase may submit a full application.
- Limited re-submissions: All others will either be allowed to resubmit a revised application, get a specific Seal of Excellence to attract external funding or not be permitted to re-apply if they do not meet the EU funding criteria. Re-submissions will be limited to two attempts.
- Evaluation criteria: The draft EIC Work Programme 2021 sets out three categories of evaluation criteria, i.e. Excellence, Impact and the Level of risk (including implementation and need for EU support). In the preliminary application phase, not all of these need to be addressed, but start-ups and SMEs submitting a full application will have to provide more detail.
- Open funding and strategic challenges: If the current draft EIC Work Programme 2021 is going ahead, the Accelerator will offer both open EU funding as well as EU funding linked to strategic challenges. These are expected to cover digital and health technologies as well as green deal innovations.
Where does the new EIC Accelerator fit into the Horizon Europe landscape?
The new EIC Accelerator is a key aspect of Pillar 3 Innovative Europe of Horizon Europe. This pillar covers the full knowledge creation and innovation lifecycle from fundamental research to commercialisation, spanning all Technology Readiness Levels as defined by the EU. This consists of
- Pathfinder: advancing research to underpin breakthrough technologies and strategic challenges. Typically, a mix of academia and business, with some exceptions. Pathfinder activities usually cover technology readiness levels (TLRs) 1-4.
- Transition: validating technologies and developing business plans for specific applications. This covers TLRs 4-6. Transition activities may also build on H2020 Future Emerging Technologies FET projects and Proof of Concepts from Pillar 1 Excellent Science.
- Accelerator: bringing innovations to market and scaling up. Typically, an Accelerator covers TRLs 5-9.
Source: EFMC Webinar on Horizon Europe
Win EU grants with the help of EFMC
Once Horizon Europe has officially launched, we will offer condensed proposal writing training tailored to the needs of innovative SMEs. This one-day training will cover the EIC Accelerator, as well as the other EIC type of actions. For now, EFMC offers an early overview of novelties under Horizon Europe in our 1,5-hour Webinar on 5 and 19 March 2021. For universities, research institutions and companies seeking a more detailed overview we offer 1-day training on Horizon Europe on 22 April 2021.
EFMC also has developed a comprehensive 2-3-day training on the proposal writing process for Horizon Europe projects on 23-25 March and 4 to 6 May 2021. You would prefer bespoke in-house training? Contact us for in-house trainings on Financial Management, Proposal Writing, Horizon Europe to get a quotation. Reach out to us at info@efmc.eu or by phone on (+372) 604 1400.