With a €3 billion budget to award 7,500 startups until 2020 with up to €2,5 million, the SME Instrument of the European Commission’s Horizon 2020 programme is the largest, most competitive non-dilutive fund in the world.
The aim is to offer Europe’s smart innovators the chance to step forward and request funding for breakthrough ideas with the potential to create entirely new markets or disrupt existing ones, across all sectors. The SME Instrument bridges the critical investment gap in early stage innovation and makes market-creating innovation easier in Europe.
With 8 companies floating on the stock market, 18 acquisitions and a total of €1.3 billion of extra private investment leveraged, the SME Instrument has established itself as an essential player on the European innovation scene.
In 2017, SME Instrument-funded companies accounted for 10% of all tech IPOs in Europe and the follow up equity investments into companies funded by the SME Instrument doubled within one year only. Each Euro invested generated €1.6 of private investment and the companies funded under Phase 2 of the programme have experienced a 118% increase in turnover and a 158% increase in employment, only two years down the line.
The success of the programme is directly linked to the quality of the selection procedure.
The SME Instrument aims to select the best companies with the most innovative ideas, a real chance of disrupting the market and a very high growth potential. Since its start in 2014, the Instrument has received 47,000 applications, only to fund 3,200 Smart Innovators across 37 countries.
After four years, the overall success rate is 8% for Phase 1 (receiving €50K) and 4.8% for Phase 2 (receiving between €0,5M and €2,5M). These rates are slightly higher than those of private acceleration programmes – based on numbers from the Global Accelerator Network.
Why come to the SME Instrument? All beneficiaries of the SME Instrument so far confirmed that the grant has been instrumental to their growth and success, offering a unique blend of close-to-market activities such as finalising testing and validate the product on the market but also due to the “label effect” that offers a unique credibility stamp, enabling them to benefit from the reputational value of the SME Instrument label with a strong de-risking effect on the investors.
To find out if you are a Smart Innovator and eligible to receive EU funding, you can do the free eligibility check here.
The official website of Horizon 2020 can be accessed here.