Which Companies Should Europe’s Scaleup Fund Back?
Commercial merit, strategic capability and the test of public participation
The Scaleup Europe Fund sits between commercial returns and European industrial strategy. Its investments therefore face a question beyond whether a company can succeed: what does the fund enable that would otherwise be smaller, slower or less anchored in Europe? Early investments such as EUCLYD make that test concrete, without yet settling the answer.
Six questions connect investment selection with the additional capital, strategic capability and European influence the fund should deliver.
🟦 Should companies that can already raise private money qualify?
Yes. A commercially managed fund needs credible businesses, strong management and a route to attractive returns. Private investor interest can validate those strengths.
The European Innovation Council describes an independently managed fund addressing Europe’s growth-capital gap, with the Commission investing on equal terms alongside other investors. It is not designed as emergency finance for companies without alternatives.
A company might raise money elsewhere while the fund still enables a larger investment programme, faster deployment or stronger European ownership. The test is the difference made by participation, rather than the absence of every other financing option.
🟦 What makes EUCLYD strategically relevant?
EUCLYD is developing semiconductor systems intended to improve the economics and energy efficiency of AI inference. Its September announcement disclosed a signed Series A financing round exceeding €200 million, co-led by Samsung, Somerset Capital Partners, the Scaleup Europe Fund and Innovation Industries.
That places the company within a strategically relevant technology field. Its plans include expanding engineering and preparing for commercial deployment.
Neither the size of the round nor the presence of other investors establishes whether equivalent financing was available without the fund. That requires information about alternative offers, investment terms and the programme those alternatives could support.
Where participation changes neither the investment programme nor its European anchoring, publicly backed capital risks buying a place in a successful round without enabling additional capability. Strategic relevance and additionality require separate evidence.
🟦 Which businesses should receive priority?
Priority should go to commercially credible businesses whose next stage would strengthen an important European capability and faces a substantial financing constraint.
The early portfolio offers different versions of that proposition: EUCLYD in AI hardware, ICEYE in satellite intelligence, and The Exploration Company in reusable space transportation. Each still needs an investment-specific assessment.
The same logic can apply to photonics production and packaging, advanced energy technologies or clinical development in life sciences. Software can also create strategic capability through widely adopted platforms.
Sector labels cannot rank these opportunities on their own. The decisive questions concern the capability being built, its customers and the capital required to reach a commercially meaningful milestone.
🟦 Should earlier EQT backing count against a company?
Earlier backing can bring valuable technical knowledge and continuity of support. EQT Ventures invested in The Exploration Company in 2023; the Scaleup Europe Fund subsequently co-led its 2026 Series C.
Such continuity can help a company finance increasingly expensive development. It also creates a governance question: how are opportunities and investment terms assessed across funds managed by the same group?
Selection should compare familiar companies with credible opportunities beyond the manager’s existing portfolio. Independent valuation, clear allocation procedures and appropriate conflict management matter. Existing relationships should neither confer automatic preference nor require automatic exclusion.
Public-value assessment should also distinguish fresh capital entering the company from money providing shareholder liquidity, and explain what each transaction achieves.
🟦 What should Europe retain from an investment?
European founders and a European office reveal only part of the picture. Three concrete tests matter: ownership of critical intellectual property, reliable access to fabrication and packaging, and corporate governance rights.
International investors and manufacturing partners can help a European company reach scale. The investment thesis should explain what Europe can continue to develop, produce or control through those arrangements.
Retained R&D, secure production access and meaningful voting or board rights provide more concrete evidence than founding nationality. These benefits should remain assessable through subsequent funding rounds, changes of ownership and eventual exit. European anchoring needs to survive the company’s growth.
🟦 How can the fund demonstrate that it makes a difference?
At company level, useful evidence includes the investment programme financed, milestones reached, follow-on capital attracted and capabilities retained in Europe.
At fund level, the question broadens: does the vehicle bring institutional investors into European growth technology and establish financing capacity that persists beyond individual deals?
The alternative outcome can never be observed directly. The manager can nevertheless explain investment rationales, set objectives and report aggregate results without publishing confidential negotiations. Round totals and valuations need to be connected to the additional European capacity being created.
Signal
The fund’s public rationale cannot rest on successful companies alone. It should demonstrate additional scale, speed or European anchoring alongside commercial returns.
An existing investor relationship neither proves nor disproves that contribution. The test concerns what changed in the financed programme, its terms or the capabilities retained in Europe.
Which critical capability can Europe build or retain because this fund was at the table?
Part of Altair Media Europe’s series, From European Science to European Industry, examining who finances the journey from breakthrough research to industrial scale and practical use.
Image credit
AI-generated illustration by OpenAI for Altair Media Europe.
Caption
Choosing Europe’s next scaleups: assessing which investments strengthen technological capability, industrial capacity and lasting European influence.
