Scaleup Europe is beginning to build the private capital layer Europe has long lacked. The next challenge is harder: creating a public market capable of absorbing the companies that emerge from it.

EQT has identified more than 1,000 potential targets for the Scaleup Europe Fund, with more than 125 already actively in sight. Europe may finally have the pipeline it long wanted. But if even a fraction become multibillion-euro companies, are its exchanges, investors and institutions ready to carry them?

The private pipeline is becoming visible. The public destination is not.

🟦 What exactly is coming through Europe’s scale-up pipeline?

Not simply another generation of software companies. EQT points to artificial intelligence, physical AI, quantum computing, dual-use technologies, clean energy, space, biotech and medical innovation. These are sectors where growth increasingly requires physical capacity as well as intellectual property.

Software can scale on code. Deep tech scales on steel, silicon, laboratories, factories and power. That changes the capital curve. A €20 million round may prove the technology. A €200 million round may industrialise it. Building global production capacity can require considerably more.

ICEYE already shows where that leads. Scaleup Europe co-led its €1 billion financing round, including €450 million in new Series F capital, at a valuation above €10 billion. This is no longer venture capital in the familiar European sense. Europe is moving from financing innovation to financing industrial scale.

🟦 If private capital is finally arriving, what happens when investors want an exit?

That is where the story changes. Scaleup Europe addresses an important weakness in the middle of the financing chain. Large European companies can remain private longer and raise much larger growth rounds without automatically turning to Silicon Valley. But private capital is temporary capital.

Early investors eventually seek liquidity. Employees hold shares. Growth investors need returns. Companies may want acquisition currency or permanent access to equity markets. Some businesses will be acquired. Others will remain private. Many will fail. But the strongest will eventually confront the public-market question.

The ECB itself identifies weak European exit opportunities as part of the scale-up problem: unattractive exits discourage late-stage investment in the first place, while weak scale-up financing reduces the pipeline of companies capable of listing. That creates Europe’s exit paradox.

Private growth capital can build larger European companies. Without deeper public markets, it can also build more valuable acquisition targets — or future New York listings.

Scale-up capital is therefore not the destination. It is the bridge.

🟦 Can Europe’s exchanges become a credible home for the winners?

The infrastructure is more substantial than the usual European pessimism suggests.

Euronext’s IPOready programme brought together more than 160 companies from 22 countries in 2026. The exchange is actively developing its pipeline of future listed businesses and has even created a dedicated Aerospace and Defence Growth Hub. Europe clearly knows how to list companies.

The harder question is whether listing in Europe remains economically compelling as those companies become larger. The European Commission puts the scale difference starkly: stock-market capitalisation equalled around 73% of EU GDP in 2024, compared with 270% in the United States. EU markets remain smaller, less liquid and more fragmented.

That matters particularly for quantum, AI infrastructure, defence, space and other capital-intensive sectors. A founder cannot be asked to choose Europe simply because a European listing is strategically desirable. The valuation must work. Liquidity must work. Analyst coverage must work. Institutional demand must work.

A European IPO has to be a rational financial choice, not an act of economic patriotism.

🟦 Can the Operators turn Europe’s exchanges into something investors experience as one market?

Europe does not lack sophisticated market infrastructure. Euronext, Deutsche Börse, Nasdaq Nordic, SIX and other operators already provide deep expertise across listings, trading, clearing, settlement and market data. The friction sits between the machines.

National company law differs. Market practices differ. Post-trading remains fragmented. Cross-border investment still encounters barriers that should not exist inside a genuine single capital market.

The Commission’s Market Integration and Supervision Package openly acknowledges the problem. It describes EU financial markets as significantly fragmented and proposes measures ranging from easier cross-border operation of trading venues to more integrated settlement and a new Pan-European Market Operator framework.

The Operators have therefore built much of the machinery. Now Europe has to connect it. The challenge is no longer creating another exchange. It is making several powerful exchanges behave like gateways into one investable European market.

🟦 And even if the market works, will European capital actually show up?

This may be the most underestimated part of the architecture. An exchange does not create liquidity by itself. Investors do.

Europe possesses enormous pools of savings in pension funds, insurers, investment funds and household wealth. Yet too little of that long-term capital reaches European innovation and growth companies.

The ECB now argues explicitly that Europe needs not only larger venture funds but a broader institutional investor base — particularly pension funds — capable of providing the volumes of risk capital required as companies expand. That is the allocation gap.

A company can be European. The exchange can be European. The regulator can be European. But if the marginal buyer of the stock remains overwhelmingly elsewhere, financial gravity can still move abroad.

This is why the Savings and Investments Union matters beyond regulation. Its stated purpose is to connect Europe’s savings more effectively with productive investment and companies seeking growth capital.

Europe does not simply need more money. It needs different allocation. The missing institution may not be another fund or exchange. It may be the European investor willing and able to own growth.

🟦 Can the Guardians and Member States align quickly enough?

The direction is becoming clearer. The Commission is trying to deepen and integrate capital markets through the Savings and Investments Union. Its Market Integration and Supervision Package seeks to remove national barriers and strengthen European-level supervision. ESMA is preparing for a larger role.

The proposed framework would move direct supervision of certain significant cross-border market infrastructures to the European level while strengthening supervisory convergence elsewhere. ESMA has said it is ready to assume those responsibilities. But Europe is still Europe.

Twenty-seven financial systems do not disappear because Brussels produces a common strategy. Taxation differs. Pension structures differ. Corporate law differs. National supervisory traditions remain. Member States still have interests to protect.

John Berrigan, the Commission’s Director-General for financial services, captured the problem this year: Europe is still trying to integrate 27 national financial systems, but the economic cost of failing to do so has become much greater. That is an important shift.

The debate is no longer whether Europe needs deeper capital markets. It is how quickly national institutions are prepared to surrender enough friction to make them possible.

Europe increasingly agrees on the destination. Alignment now has to survive implementation.

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SIGNAL

EQT’s 1,000 potential targets suggest that Europe may not have a shortage of companies worth scaling. It has a problem connecting the stages of their growth.

Private growth capital is beginning to fill one gap. Europe’s exchanges are building the public-market pipeline. The Operators are integrating infrastructure. The Guardians are moving towards more European supervision. And policymakers increasingly understand that Europe’s vast savings must become a larger source of productive capital. But the architecture only works if those layers connect.

The real test is not whether Europe can finance a €200 million growth round. It is whether a company that becomes worth €10 billion still sees Europe as a compelling place to raise public capital, attract institutional investors and remain financially anchored. European founders increasingly want to build here and scale here.

Europe’s next challenge is making it economically rational to list here — and financially attractive to stay here.

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Credit

Image: Altair Media / OpenAI

Caption

Europe’s scale-up pipeline is becoming visible. The next test is whether its capital markets can provide the path from private growth capital to European public-market liquidity.