Bridging the gap: mapping investors to strengthen Europe’s innovation ecosystem

The latest study by the European Patent Office (EPO) maps specialised technology investors and introduces a novel metric to help startups identify them. A new filter in the Deep Tech Finder tool also makes it easier to search for these investors. 

The EPO’s Observatory on Patents and Technology has published a new study identifying the investors that are vital to the successful commercialisation of cutting-edge innovations. The study – Mapping investors for European innovators – discusses the challenges that tech startups face in securing public and private funding both in Europe and, by way of comparison, in the US.

"Startups play a crucial role in commercialising disruptive ideas with great potential to drive progress. However, as highlighted in Mario Draghi’s report, many innovative companies face financial obstacles to growth within Europe,” said EPO President, António Campinos. “This funding gap hinders the transformation of innovation into scalable startups, driving entrepreneurs to seek opportunities abroad. Bridging this gap is crucial to revitalising sustainable growth across Europe."

Technology Investor Score (TIS)

The report introduces a new metric, the Technology Investor Score (TIS), which is the proportion of companies in an investor's portfolio that have filed patent applications. It ranges from zero to one, with higher values indicating higher degrees of investor specialisation in patented technology. With over one thousand distinct values, its high granularity makes the TIS a powerful tool for identifying investors well suited to funding innovation.

Varying degrees of investor engagement in tech startups

Data experts at the EPO have calculated the TIS for over 6 100 global investors active in Europe – both public and private – as well as a further 8 000 investors active in the US. They found that 88% of European investors have portfolios that include companies with patent applications. In addition 8% have portfolios with more than half of their companies holding patents, demonstrating a particularly strong engagement with patenting startups.

Role of public and private investors

The study shows that public investors are essential to Europe's innovation ecosystem, working alongside private investors to drive progress. Major public investors include both pan-European institutions such as the European Innovation Council (EIC) under Horizon Europe and the European Investment Bank (EIB), and national innovation agencies such as Bpifrance, Innovation UK and Innosuisse, as well as regional innovation agencies. Most public investors have high TIS values, consistent with their mission to seed early-stage innovations.

Insights for European competitiveness

The study’s findings hint at an interrupted pipeline for tech investors in Europe, where public early-stage high-tech investors are not followed by late-stage private investors that have a major presence in the US market. Significant funding gaps exist between Europe and the US for private investors heavily involved in technology, particularly in late-stage rounds. This gap contrasts with a funding surplus for public investors. Among the top 100 private investors in Europe, 62% focus on early-stage funding, while only 22% specialise in late-stage funding, underscoring the limited capital available for scaling up technologies and bringing inventions to market. In contrast, private investors account for 98 of the top 100 most central investors in the US network of co-investors, with over half specialising in late-stage companies, reflecting stronger private support for scaling high-tech companies.

Addressing Europe's startup financing challenges

The comprehensive mapping of tech investors provided in the study is part of the EPO’s wider effort to support SMEs and startups in Europe. To complement the study, the EPO’s Deep Tech Finder has been updated with a new filter that helps startups find the most suitable investors for their specific company profile based on criteria such as funding stage, country or technology field. This update expands the functionalities of this free online tool, which already allowed users to effortlessly find over 10 000 investment-ready European startups, spin-outs and/or universities with patent applications at the EPO.

Financing Innovation programme

The EPO’s Observatory on Patents and Technology has launched a web section dedicated to its Financing Innovation programme. This section offers detailed information on EPO schemes which support smaller and less experienced entities, ensuring that they can fully benefit from patents. Additionally, it provides a rich collection of materials to help startups and investors leverage patents for financing innovation. Resources such as the Deep Tech Finder, studies, and other relevant materials are all accessible from this platform.