Scaleup Europe Fund makes first bet: satellite firm ICEYE

Startups can’t afford to stay still even during the European summer lull, and Brussels is following suit. In the middle of peak vacation time, the European Commission announced that the Scaleup Europe Fund was fully operational, with investments “expected in the coming weeks.” Its first deal was made public the very next day.

ICEYE, a Finnish satellite intelligence company now valued above $11 billion, is the first startup backed by this public-private vehicle, which co-led its Series F round. Similar deals should follow soon: Scaleup Europe plans to deploy €5 billion ($5.7 billion) into growth-stage startups based in the EU or partnering countries, operating in strategic sectors. “Space-based intelligence is becoming critical infrastructure for governments, and the Scaleup Europe Fund exists so companies like ours don’t have to leave Europe to compete globally,” ICEYE CEO Rafal Modrzewski wrote on LinkedIn.

Helping Europe build scaleups and keep them is central to the fund’s purpose, driven by the view that Europe misses out when its deep-tech talent lacks late-stage funding or only finds it abroad. Unlike programs managed directly by European institutions, Scaleup Europe is backed by private investors and run by Swedish asset manager EQT, selected via an open call to “experienced fund managers.” Other reported candidates included Eurazeo, Northzone, and Vitruvian Partners, with Atomico as a final challenger; Atomico may have been hindered by having its headquarters in London, though it had described Scaleup Europe as “urgent and necessary” when EQT was announced as the winner. EQT itself called the initiative a “big moment for Europe.” “Europe has proven its ability to create successful early-stage technology companies, the challenge is now to scale those businesses into becoming global leaders while maintaining their European roots,” EQT CEO and managing partner Per Franzén said in a statement.

The European Commission has given EQT leeway on where to invest, with a mandate “including but not limited to deep tech, life sciences, clean tech, advanced manufacturing, and digital technologies” — overlapping with AI, biotech, energy, robotics, semiconductors, and space, as shown by ICEYE. With ties to the Wallenberg family, which was initially listed as a potential anchor investor, EQT was arguably a front-runner to run the fund; with more than $300 million in assets under management, it will also help the fund reach its total fundraising target, starting with a “significant commitment” of its own capital.

It’s unclear how much capital Scaleup Europe has raised so far, but its first closing was anchored by a €1 billion investment from the Commission (approximately $1.15 billion), investing alongside institutional investors across Europe credited as “founding investors” — including German insurer Allianz; APG, representing Dutch pension fund ABP; Spanish bank-affiliated funds CriteriaCaixa and Santander-owned Mouro Capital; Italy’s Fondazione Compagnia di San Paolo, Intesa Sanpaolo, and Fondazione Cariplo; and Denmark’s EIFO and Novo Holdings. Fundraising is expected to extend into 2027, with a second round described as potentially open to non-European investors, as long as they’re aligned with the fund’s objectives.

Why it matters

According to reports, the Commission suggested Scaleup Europe could eventually expand to €25 billion ($28.9 billion) — a scale that would put it in the same category as Asian and U.S. growth funds, and signal Brussels is willing to compete directly for the late-stage capital that has historically pushed European deep-tech companies abroad.