EC launches €300m platform Escalar

Alessia Argentieri
15 April 2020

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The European Commission has launched European Scale-Up Action for Risk Capital (Escalar), a new investment platform developed together with the European Investment Fund (EIF), to finance new and existing venture capital and private equity funds across Europe.

In its pilot phase, Escalar will provide up to €300m – backed by the European Fund for Strategic Investments (EFSI) – with the aim of increasing the investment capacity of VC and PE funds, triggering potential investments of up to €1.2bn.

Escalar will commit up to 50% of the size of each fund.

With the launch of Escalar, the Commission is delivering on one of the actions announced with its new strategy to improve access to finance for SMEs.

This initiative is particularly relevant in the difficult economic situation that SMEs are facing due to the coronavirus outbreak. The new platform intends to support companies hit by the emergency during and after the crisis, to ensure that the European economy can stay at the helm of global technological developments and accelerate its recovery.

"Due to the coronavirus crisis, exit routes for VC- and PE-backed companies are temporarily closed," said the EC in a statement. "This implies that VC and PE funds will have to support fast-growing portfolio companies for longer. An investment from Escalar will support funds making investments (including follow-on investments) in fast-growing companies, allowing them to get through this period of economic disruption."

The programme will remain in its pilot phase for 2020 with the objective that Escalar could become a mainstream European financial instrument. Interested fund managers can participate in the scheme by responding to the EIF's open call for expressions of interest.