ECSO, private investors plan €1bn cybersecurity fund-of-funds

Laura Larghi (Mergermarket)
05 October 2020

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The European Cyber Security Organization (ECSO) and eight private investors have approached the European Commission with a proposal to build a тЌ1bn European cybersecurity investment platform.

ECSO co-signed a letter of intent addressed to the Commission in mid-September, together with private investors Ace Management, Adara Ventures, eCapital Entrepreneurial Partners, KPN Ventures, P101, Primomiglio, TII Capital and Vendep Capital, with the support of CyberValleys Platform.

The platform, designed to be a pan-European fund-of-funds, aims to reinforce and consolidate the whole investment chain towards a comprehensive public-private approach on investments, with the end goal of increasing the EU's competitiveness and attractiveness when it comes to cybersecurity.

The political support of the European Commission and a direct investment from the European Investment Fund would be ideal, ESCO senior policy manager Danilo D'Elia told Unquote. He explained that the European Commission needs to close its budget by the end of the year, and therefore a reaction to the ECSO proposal is expected in the same timeframe.

"The European tech industry has abundant technical and entrepreneurial talent, but lacks the resources needed to build and scale global champions, particularly in the cybersecurity space," Adara Ventures managing partner Alberto Gómez told Unquote. "This is a competitive weakness for Europe in today's data-driven economy. A large and specialised institutional investor, such as the one promoted by ECSO, can serve as a catalyst for closing the gap and for developing VC firms with the capabilities to nurture such home-grown cybersecurity global leaders. Adara would be honored to compete for such funding and to be among the local VC firms supporting European security sovereignty while delivering strong financial returns. We can make it happen, and can do so with a market-driven approach."

ECSO is already conducting a feasibility study on the project in cooperation with its members; the preliminary results of the study will likely be finalised with the technical support of the advisory hub of the European Investment Bank, D'Elia said. He noted that since the news has been made public, ECSO had already received several expressions of interest from multiple funds, including from the US.

ECSO is already working closely with the European Commission's Directorate-General for Communications Networks, Content and Technology (DG Connect), as well as other European Commission organisations including the European Investment Bank (EIB) and the European Investment Fund (EIF).