Bridging the Gap in European Scale-up Funding: The Green Imperative in an Unprecedented Time

The document argues that European scale-ups, particularly in deep-tech and green-tech, face a funding "valley of death" due to high capital requirements and long R&D cycles that mismatch traditional venture capital models. It highlights that while Europe has strong innovation fundamentals, it trails the US in scaling and exiting companies. To support the transition to a climate-neutral economy by 2050, the report proposes streamlining public funding access, adopting blended finance to de-risk private investment, expanding public and private procurement for novel technologies, and empowering scale-ups to influence policy and standards.

• European technology companies struggle to scale compared to US counterparts; only one in eight European companies scale, whereas one in four do so in the US, and US start-up investment is 3.4 times the level of Europe's.
• Deep-tech companies, which rely on scientific discoveries in fields like physics and medicine, face a "valley of death" because they require higher capital and longer timeframes to reach market maturity than traditional start-ups, making them a poor fit for traditional VC funds that typically seek exits within three to five years.
• The report identifies a critical need for blended finance—using public funds to de-risk private investment—to mobilize the capital required for deep-tech and green-tech, noting that blended projects can achieve a leverage ratio of €6.30 for every €1 invested, compared to €0.6 for regular public investment.
• Public funding access in Europe is hindered by heavy bureaucracy and overlapping programmes, forcing founders to spend resources on grant-writing and navigating multiple agencies rather than building technology.
• Procurement processes in Europe's public and private sectors favour established corporations, creating significant barriers for B2B and B2B2C scale-ups whose sales cycles can take up to 18 months, often exceeding the company's cash runway of three to six months.
• To achieve the goals of the Green Deal and the Paris Agreement, an additional €260 billion of annual investment is required through 2030.
• The report suggests that funding industry associations for growth-stage companies could help them counter the influence of incumbents in policy-making and standardization, citing the International Platform of Insects for Food and Feed (IPIFF) as a successful example of opening markets through legislative work.

APA

World Economic Forum (2020). Bridging the Gap in European Scale-up Funding: The Green Imperative in an Unprecedented Time. http://www3.weforum.org/docs/WEF_Bridging_the_Gap_in_European_Scale_up_Funding_2020.pdf

Chicago

World Economic Forum. Bridging the Gap in European Scale-up Funding: The Green Imperative in an Unprecedented Time. 2020. http://www3.weforum.org/docs/WEF_Bridging_the_Gap_in_European_Scale_up_Funding_2020.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Bridging the Gap in European Scale-up Funding: The Green Imperative in an Unprecedented Time |date=June 2020 |url=http://www3.weforum.org/docs/WEF_Bridging_the_Gap_in_European_Scale_up_Funding_2020.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2020bridging, author = {{World Economic Forum}}, title = {{Bridging the Gap in European Scale-up Funding: The Green Imperative in an Unprecedented Time}}, institution = {World Economic Forum}, year = {2020}, month = jun, url = {http://www3.weforum.org/docs/WEF_Bridging_the_Gap_in_European_Scale_up_Funding_2020.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }