The EIC Accelerator Pilot — A New Funding Opportunity for Startups and SMEs

What is the EIC Accelerator Pilot?

Building on the previous flagship initiative — namely the SME Instrument Phase II — the EIC Accelerator Pilot was launched in June this year as part of the Enhanced European Innovation Council pilot .

A total budget of more than €1.3 billion for 2019–2020 has been allocated to support high-risk, high-potential small and medium-sized innovative enterprises (established in an EU Member State or a Horizon 2020 associated country) willing to develop and commercialise new products, services and business models that could drive economic growth and shape new markets or disrupt existing ones in Europe and worldwide.

Who can benefit?

This program is intended for SMEs with a groundbreaking product \ service \ process \ business model, who are conducting close-to-market R&D.

The EIC Accelerator Pilot supports close-to-market activities, with the aim of giving a strong boost to breakthrough innovation with a market-creating potential. Hence, highly innovative SMEs with a clear commercial ambition and a potential for high growth and internationalisation are the prime target.

What type of activities can be financed?

Fully-fledged projects that can take between 12–24 months, with the goal of scaling-up a prototype and advancing in close-to-market R&D towards market uptake.

EU-funded research and innovation projects adopted the Technology Readiness Level scale in the framework of the Horizon 2020 program starting from 2014. The Accelerator Pilot will finance activities from TRL6 (technology demonstrated in a relevant environment ) until TRL8 (system complete and qualified under the Grant-only option).

Activities funded can be of several types: prototyping, miniaturisation, scaling-up, design, performance verification, testing, demonstration, development of pilot lines, validation for market replication.

What type of funding?

The EIC Accelerator Pilot provides grant-only support as well as support in the form of blended finance (combining grant and equity).

1.Grant-only: in the range of €500,000 — € 2.5 million. The company receives 70% of the amount needed for the project + 25% overhead (~87.5%).). Note that the grant will only finance activities from TRL6 to TRL8. TRL 9 activities aimed at bringing innovation to investment readiness and maturity for future market take-up (commercialisation) will only be covered by the Equity option as explained as follows.

2.Equity: up to €15 million for an individual innovation project (€100 million total budget for equity in 2019–2020 pilot phase). 
The equity part will cover activities of TRL 9 or above, aiming at supporting companies with commercialisation activities and being ready for full-scale up.

Projects funded under the blended-finance scheme are subject to due diligence, which will mainly focus on evaluating compliance and risk level.

Only grant or grant + equity options will be allowed — no option to receive only equity is foreseen.

What is the ideal candidate profile and what happens if I do not fit?

Companies could be either pre-revenue, or with revenues but non-profitable, or with a commercial activity but unable to raise the investment needed to full deployment of their potential.

A risk component is essential as the Accelerator only supports proposals that are too risky. Various typologies of risks are covered during the evaluation, including technology, regulatory and implementation/market risks.

Proposals initially rejected on the basis of their bankability but assessed as viable for other types of EU financing will be invited to consider other European Union financial instruments — InnovFin instruments managed by the EIB Group for example — or find alternate solution on their side.

When can companies apply?

There is a continuous open call until the end of 2020 for bottom-up proposals with five cut-off dates: 9 October 2019, 8 January 2020, 18 March 2020, 19 May 2020 and 7 October 2020.

Applications must be submitted through the Funding & Tenders Portal. A single template for funding under the Accelerator is available in the EIC website for the two different options (grant-only and blended finance). The structure is articulated around two main parts, respectively called Part A and Part B.

What is the evaluation process?

Applications are evaluated in two steps: Step 1 (remote evaluation) and, only for proposals that pass all quality thresholds, Step 2 (face-to-face interview).

The process of evaluation can have three outcomes: ‘Go’ decision, ‘No Go’ decision or ‘change into blended finance’ decision.

What are the evaluation criteria?

Proposals are evaluated by experts on the basis of three award criteria: 33% ‘impact’, 33% ‘excellence’ and 33% ‘quality and efficiency of implementation’. Bear in mind that the risk element is evaluated in each section.

What is the timing?

The time-to-inform for the Accelerator Pilot grant part remains 4 months and the expected time-to-grant for the grant part remains 6 months from the date of application.

The due diligence shall start one month after the evaluation decision interview phase (step 2) of the evaluation. The due diligence and the equity investment should take an additional 6 months (on average) from the start of the due diligence process.

My EU Consulting

We are a Brussels-based consultancy agency that helps startups scale through the most competitive innovation scheme in the world.

We only select the most innovative and promising start-ups in Europe and work alongside them throughout the application process to win the funding.

Would you like to find out if you are eligible? Send us your pitch.

The article is based on official guidelines issued by the European Commission.