Hi Marc, great to host you on the EUSP blog!
Many of us know about the work of the EIB but how is your institution reacting to the current crisis in its investment strategy?
The Covid-19 crisis had a massive and abrupt negative impact on the European economy. As the bank of the European Union, the EIB plays a key role in supporting it with a particular focus on innovation, climate, smaller and medium-sized enterprises (SMEs) and infrastructure. The Bank quickly reacted to the crisis and in March adopted an immediate response package of up to EUR 28bn in support of SMEs. It then developed the Pan-European Guarantee Fund (“EGF”), which was endorsed by the European Council. The EGF is a EUR 25bn guarantee fund that will enable the EIB Group to scale up its support for mainly small and medium-sized European companies, providing up to EUR 200 billion of additional financing. On top of these extraordinary measures, as the largest multilateral lender worldwide, we keep financing projects and companies in line with the existing mandates and policy objectives of the European Union.
Now let’s talk a bit about our community. How do you engage with startups in general and with the EUSP startups in particular?
The EIB is also the climate bank of the EU, and as such developed various programs to finance the energy transition. Start-ups play a key role in the development of new ideas, technologies and business models to tackle this issue. We designed last year together with the European Commission a dedicated envelope for smarter, safer and cleaner transport, the Future Mobility facility. This facility is particularly well suited, both in terms of eligibility and risk appetite, for new mobility startups at growth stage. Our objective is to support companies with decarbonising solutions in their expansion and to provide them with “dry powder” through tailor-made financing instruments. We have a number of tools in the Future Mobility box including subordinated loans to quasi-equity financings.
We act as a silent investor and our presence as financial partner has a signaling effect that can help catalyse further financing. This often proves to be very beneficial for eligible mobility startups.
This explains indeed the nature of the mutual interest between the EIB and the EUSP. This week, we are taking our partnership to another level by holding a joint pitching day between EIB experts and some of of the EUSP winning startups. Maybe you can tell us what drew your interest at the particular startups which were invited*?
We are looking for promising and innovative companies at commercialization or deployment stage, with a sound business model, strong shareholders and a clear solution to decarbonise transport in the EU. This covers for instance car sharing, mobility as a service, deployment of electric vehicle charging stations as well as many other activities. We expect companies we invited to pitch to check our eligibility criteria and we are looking forward to meeting them. However, during our screening, we came across plenty of very interesting start-ups that unfortunately do not fit our requirements yet and thus cannot receive our support, but we hope to hear from them as soon as they are ready (details of the Future Mobility program can be found here).
Finally, what advice can you give to these start-ups and to all clean mobility startups who are struggling to find financing during this crisis?
Start-ups had to react very quickly during this crisis, both on the operational side and to be able to attract financing to keep the boat afloat and navigate the storm. In these uncertain times, it is even more important for them to be able to show the potential of their markets and the resilience of their business models.
It is also paramount to wisely choose their investors and industrial partners, because trustworthy partners are invaluable assets when facing adversity. Through the European Investment Fund the EIB Group enables a wide range of partners to provide access to finance for start-ups and smaller businesses. You can find these partners and further financing options here: https://www.eif.org/EIF_for/sme_finance/index.htm.
*In order to respect the confidentiality of the process, we cannot disclose the names of the participating startups at this point.