How Europe’s Institutional Investors Pact Aims to Fund Tech Scale-Ups

Europe’s challenge is not only creating startups; it is ensuring that successful companies can finance large growth rounds without needing to look outside Europe. The European Commission and European Investment Bank (EIB) Group’s European Institutional Investors Pact is intended to address that bottleneck by making European venture capital and growth equity easier for large, long-term investors to access.

Launched at the TechEU Equity Summit on 22 September 2026, the voluntary framework began with 13 institutional investors that expressed an intention to channel capital into Europe’s innovation and scale-up ecosystem.20

The core idea: turn institutional savings into scale-up capital

Pension funds, insurers and banks hold substantial pools of long-term capital, but they need practical ways to evaluate, access and invest in specialist private-market funds. The Pact is designed to improve those routes rather than operate as a standalone subsidy programme.

It has two practical components:

• A policy dialogue forum led by the Commission, where institutional investors and policymakers can identify barriers affecting investment in European growth financing.22
• An EIB Group investment platform that presents institutional investors with European funds that are actively raising capital. The platform is intended to feature relevant funds targeting at least €300 million in fund size.22

The intended chain is indirect but important: institutional investors commit capital to experienced European venture-capital and growth-equity managers; those managers invest across a portfolio of later-stage companies; scale-ups gain a deeper pool of local financing as they expand.

Two financing channels, two jobs

The Pact points investors toward two complementary vehicles.

ETCI 2.0: build larger European funds

The European Tech Champions Initiative 2.0 (ETCI 2.0) is planned as a €15 billion initiative combining an expanded fund-of-funds strategy with an investment platform for institutional investors.2026 Its aim is to crowd institutional capital in alongside resources from Member States and the EIB Group.

A fund-of-funds does not normally select every operating company itself. Instead, it backs specialist venture and private-equity managers, giving those managers more capacity to raise large funds and finance growth-stage businesses. That matters because bigger funds can support companies through later rounds rather than forcing an early sale or a search for capital elsewhere.

Scaleup Europe Fund: invest directly in strategic companies

The Scaleup Europe Fund is the complementary direct-investment tool. It has a €5 billion target, sits within the European Innovation Council Fund and is managed by EQT, which can make investment decisions independently under the fund’s framework.1

The fund is focused on late-stage and growth investments in strategic technology areas including artificial intelligence, quantum technologies, semiconductors, robotics and autonomous systems, energy, space, biotechnology, medical technology, advanced materials and agritech.7

Put simply, ETCI 2.0 is meant to expand the supply of specialist European investment funds; the Scaleup Europe Fund is intended to provide major direct growth investments in selected companies. The Commission’s Startup and Scaleup Strategy describes the two as complementary instruments.16

What ETCI’s first phase achieved

ETCI’s first phase provides an early indication of the market-building model. The EIF says ETCI 1 received up to €3.9 billion in initial resources from six EU Member States, supported 15 growth-stage “mega-funds,” and nearly doubled the number of mega-funds in Europe’s growth-stage ecosystem.19

That is a structural result: public cornerstone capital can help managers form larger European funds. It should not, however, be treated as proof of long-term investment performance. The more meaningful test will be whether the funds and their portfolio companies generate durable returns over time.

How the Pact fits the EU’s scale-up strategy

The Institutional Investors Pact sits within the EU’s broader Startup and Scaleup Strategy, which pairs finance initiatives with measures intended to make it easier for companies to start and scale across Europe. The strategy specifically anticipated a deeper ETCI 2.0 fund-of-funds structure, pooling public and private capital, alongside the Scaleup Europe Fund.16

In that context, the Pact is a capital-mobilisation layer: it seeks to connect Europe’s institutional savings base with the fund managers and companies that need patient growth capital.

Why “voluntary” is the decisive word

The Pact can improve access, visibility and policy coordination, but it does not require an investment committee to allocate money. Institutions will still assess private-market opportunities against alternatives on expected returns, risk, liquidity, fees, diversification and applicable capital requirements.

That makes the Pact’s success fundamentally commercial. Policy support may help create investable channels and larger funds, but repeat allocations will depend on whether European venture and growth-equity managers—and the scale-ups they support—can deliver competitive, repeatable risk-adjusted returns. If they do, the Pact could help create a reinforcing cycle of deeper funds and larger European growth rounds. If they do not, voluntary interest alone will not close the funding gap.