Portugal joins €15 billion European tech fund to keep unicorns from moving to U.S.

Portugal will join the second phase of the European Tech Champions Initiative (ETCI 2.0), a major investment vehicle designed to help Europe’s fastest-growing technology companies remain in the continent rather than seeking funding in the United States.

However, the government has not yet disclosed how much it will contribute to the initiative, which aims to raise up to €15 billion from EU member states and private institutional investors.

The expansion of the programme was announced following yesterday’s meeting of EU finance ministers (Ecofin) in Brussels, with the European Investment Bank (EIB) confirming that member states had expressed support for the fund’s second phase.

Portuguese Finance Minister Joaquim Miranda Sarmento said Portugal supports ETCI 2.0 as “a practical initiative to deepen European capital markets, mobilise private investment and help innovative companies scale up and compete internationally.”

Tackling Europe’s funding gap

The ETCI operates as a “fund of funds”, investing in European venture capital and private equity funds that finance companies in later stages of growth—an area where Europe has long struggled to compete with U.S. capital markets.

The EIB says the expanded initiative aims to address one of Europe’s biggest structural weaknesses: the lack of large-scale investment available to technology firms once they require funding rounds exceeding hundreds of millions of euros.

EIB President Nadia Calviño described the initiative as “a decisive step” towards closing Europe’s scale-up financing gap, ensuring innovative ideas and companies “can remain and prosper in Europe.”

Speaking to Expresso last year, Calviño said European venture capital remained insufficient for companies seeking investments above €500 million – often forcing them to relocate or raise funds overseas.

She highlighted the EIB’s backing of three Portuguese unicorns—Remote, Anchorage and Sword Health—as evidence of the institution’s growing support for Portugal’s technology sector.

Four times larger than the original fund

The first ETCI, launched in 2023, was backed by France, Germany, Spain, Italy, Belgium and the Netherlands and targeted €3.9 billion in capital.

Through investments in 15 venture capital and private equity funds, the programme sought to mobilise more than €20 billion for European scale-up companies working in sectors including artificial intelligence, fintech and deep technology.

According to the EIB, those investments helped support the development of 12 EU-based unicorn companies.

The new ETCI 2.0 aims to expand dramatically, with the EIB contributing up to €1.25 billion and total fundraising reaching €15 billion. The bank estimates this could ultimately mobilise as much as €80 billion in investment for more than 1,500 high-growth European companies.

The final size of the fund will only become clear after participating governments and investors complete their financial commitments during the initiative’s first closing in the coming months.

Private investors join initiative

Unlike the original programme, ETCI 2.0 will also include private institutional investors.

The EIB said initial participants include Denmark’s Danske Bank, Spain’s AltamarCAM, Banco Santander and BBVA, Italy’s Azimut Holding and Green Arrow Capital, and the Compagnia di San Paolo foundation, with additional investors expected to join later.

The initiative also plans to create a pan-European investment platform giving private investors greater access to European technology funds and market intelligence.

Separately, Portugal is preparing its own national “fund of funds” through the Banco Português de Fomento. The vehicle (not widely backed) is expected to launch by the end of the year, says Expresso, and will co-invest alongside private investors in venture capital funds. It is really not clear whether this is ‘set in stone’, or simply another of the government’s many announcements.

Source material: Expresso