EU Horizon investments

What is Horizon Europe?

Horizon Europe is the EU’s key funding programme for research and innovation. Following the Multiannual Financial Framework Midterm Review (MTR) decision, the indicative funding amount for Horizon Europe for the period 2021-2027 is EUR 93.5 billion.

It tackles climate change, helps to achieve the UN’s Sustainable Development Goals and boosts the EU’s competitiveness and growth.

The programme facilitates collaboration and strengthens the impact of research and innovation in developing, supporting and implementing EU policies while tackling global challenges. It supports creating and better dispersing of excellent knowledge and technologies.

It creates jobs, fully engages the EU’s talent pool, boosts economic growth, promotes industrial competitiveness and optimises investment impact within a strengthened European Research Area.

Legal entities from the EU and associated countries can participate.

1. The Financial Muscle

The program is backed by a massive budget of approximately €95.5 billion (including contributions from the NextGenerationEU recovery fund). This capital is deployed not just to fund academic papers, but to de-risk deep technology and bridge the gap between laboratory research and commercial market success.

2. Where the Money Goes: The Three Pillars

Horizon Europe structures its investments across three main pillars:

  • Pillar I: Excellent Science

    • Focus: Strengthening the EU's scientific base.

    • Key Vehicle: The European Research Council (ERC), which funds frontier research by the best scientists in Europe.

  • Pillar II: Global Challenges & Industrial Competitiveness

    • Focus: Solving societal issues and boosting industrial technologies.

    • Key Vehicles: Funding is organized into "Clusters" (e.g., Health, Digital, Climate, Energy) and specific Missions (e.g., Beating Cancer, Climate-Neutral Cities).

  • Pillar III: Innovative Europe (The Investment Engine)

    • Focus: Making Europe a leader in market-creating innovation.

    • Key Vehicle: The European Innovation Council (EIC). This is the most significant evolution in EU funding, moving beyond grants to actual equity investment (see below).

3. The "Investment" Shift: The European Innovation Council (EIC)

When discussing "investments" in Horizon Europe, the European Innovation Council (EIC) is the most critical component. It represents a shift from traditional subsidies to a venture-capital-style approach for high-risk, high-impact startups.

  • The EIC Fund: This is the EU's dedicated venture capital arm. It provides direct equity investments (ownership stakes) in startups and SMEs, typically ranging from €0.5 million to €15 million.

  • Blended Finance: A unique mechanism that combines non-repayable grants (for research/prototyping) with equity (for scaling up).

  • Crowding In: The goal of the EIC is to "crowd in" private investors. By having the EU take the initial high risk (which many private VCs avoid), it gives confidence to private venture capitalists to co-invest, multiplying the total capital available to European tech companies.

4. Strategic Impact

Horizon Europe invests with a purpose. A significant portion of the budget is legally earmarked for specific policy goals:

  • 35% of the budget targets climate objectives (The Green Deal).

  • Significant funds are allocated to the Digital Transition (AI, Quantum Computing, Semiconductors).