BRUSSELS (Reuters) - Spain, Germany, France, Italy and Belgium and the European Investment Bank launched on Monday a 3.75 billion euro ($4.02 billion) fund to finance the growth of promising European tech companies and boost the EU's attractiveness as an innovation hub.
The fund is aimed at addressing one of the common problems of successful European start-ups, which often cannot expand in Europe for lack of a better functioning capital market and choose to move to the United States to grow.
"Europe's tech start-ups often do not have sufficient capital to compete on a global scale and are pushed to relocate overseas. Closing this scale-up gap could create a large number of highly skilled jobs and boost growth," the fund's founders said in a statement.
The fund, called the European Tech Champions Initiative (ETCI), will pool public resources from participating countries and the EIB to invest in large-scale venture capital funds.
These, in turn, will provide growth financing to European tech champions, especially to those seeking more than 50 million euros. The ETCI will be managed by the European Investment Fund, which is part of the European Union's EIB lending arm.
Spain, Germany, and France each contributed 1 billion euros, Italy contributed 150 million euros and Belgium 100 million euros. The EIB provided 500 million euros.
"The size of the fund is expected to grow further with future commitments," the statement said.
($1 = 0.9332 euros)