Opens doors to €4bn investment scheme for emerging tech firms
The UK is in talks to join a €4bn EU equity investment fund for start-ups, as London and Brussels seek to deepen cooperation years after Brexit.
Ekaterina Zaharieva, the European Commissioner for Start-ups, Research and Innovation, told the Financial Times discussions are under way to allow British companies to access the European Innovation Council (EIC) Fund, the EU’s flagship deep-tech investment scheme worth €4bn.
Zaharieva said closer cooperation on innovation was in the “mutual interest” of both sides, although changes to existing agreements would be needed before the UK could formally join.
The negotiations come nearly a decade after the Brexit referendum reshaped relations between the two parties.
The EIC Fund sits within Horizon Europe, the EU’s €96bn scientific research and innovation programme, which the UK formally rejoined in 2024 as an “associate country” following years of political wrangling.
While British universities and researchers regained access to Horizon funding, UK-based start-ups and businesses remain excluded from the programme’s equity investment arm.
British investors can’t fund British companies – yet
The equity investment fund supports fast-growing technology firms in sectors such as AI, quantum computing, semiconductors and biotechnology.
Zaharieva described the EIC as “the biggest deep-tech European fund” and said there was strong interest in finding a way for British companies to participate.
“There are UK investors who are actually investing together with the EIC fund already,” she said, noting that British backers had committed around €200m so far, but are currently unable to invest directly in UK-based companies.
Under the current arrangements, only firms based in EU member states or certain participating countries can directly receive EIC equity funding.
British participation would require London to contribute financially to the fund, Ms Zaharieva said, adding that any deal must remain “fair to European taxpayers.”
Officials on both sides are reportedly aiming to secure an agreement before the next Horizon funding cycle begins in 2027.
The forthcoming programme, due to run until 2034, is expected to exceed the current €4bn budget.
Resetting relations
The UK and EU are currently preparing for a summit, expected later this summer, where leaders are seeking to advance a broader “reset” in relations.
Alongside the Horizon talks, the UK has also opened separate negotiations to join the EU’s proposed €5bn Scaleup Europe Fund, which is designed to support later-stage companies seeking to expand internationally.
Diplomats are also working on agreements covering youth experience, agricultural trade checks and the linking of carbon emissions trading systems.
Before Brexit, the UK was one of the largest beneficiaries of EU research funding, receiving more than €7bn between 2014 and 2020, over 12% of all Horizon grants awarded during that period.
Industry welcomes ‘positive signals’
Industry groups welcomed the prospect of deeper cooperation.
Sabina Ciofu, international policy and strategy lead at techUK, said the continued exclusion of British firms from EIC equity funding represented a “significant gap” in European innovation policy.
Michael Moore, chief executive of UK Private Capital, said investors across the sector were closely watching the negotiations.
The UK government says no final decisions have yet been taken.
A spokesperson for the Department for Science, Innovation and Technology said ministers were exploring options that were “fair” and offered “best value” while helping to “grow our economies and improve lives.”