TLDR:
European scale-up companies face persistent financing barriers despite assistance from public organizations like the European Investment Bank (EIB) Group. The EIB report highlights slower capital accumulation, limited EU capital market depth, and reliance on foreign investors as key challenges. To address these issues, the report recommends enhancing Europe’s capital markets, encouraging private investment, and providing support at earlier stages of technological development.
Summary:
European scale-up companies have expanded with support from public organizations like the European Investment Bank (EIB) Group but continue to face financing barriers, according to a new EIB report. The report emphasizes the importance of increased investment in these companies for the EU to maintain technological competitiveness. The key takeaways from the report include:
- Slower capital accumulation for firms due to limited EU capital markets
- Recommendations to enhance Europe’s capital markets and encourage private investment
- European venture capital investment being six times lower than in the US
- Reliance on foreign investors for financing and potential talent depletion
The report suggests that to address these challenges, the EU needs to complete the European capital markets union, catalyze private investment, provide early-stage support for technological development, and diversify funding sources. Encouraging participation from private pension funds and insurance companies in investing in innovative companies could also mobilize national savings and support financial stability.
