Technology startups possess significant potential to drive innovation and progress. They also present unique challenges that only investors with expertise in intellectual property are able to effectively address.
A new study published by the European Patent Office (EPO) highlights the investors crucial for the successful commercialization of innovative inventions. The study shows that technology investment in Europe is primarily driven by large public programs and specialized private investors, revealing a funding gap compared to the United States.
“Startups play a pivotal role in commercializing disruptive ideas with great potential to advance progress. However, as highlighted in Mario Draghi’s report, many innovative companies face financial barriers to grow within Europe,” said EPO President António Campinos. “This funding gap hinders the transformation of innovation into scalable startups, leading entrepreneurs to seek opportunities abroad. Bridging this gap is critical to revitalizing sustainable growth across Europe.”
The study introduces a new tool, the Technology Investor Score (TIS), which measures the percentage of companies in an investor’s portfolio that have filed patent applications. Using this measure, designed to identify investors specializing in technology, the study reveals that 88% of European investors have portfolios that include companies with patents. Additionally, 8% have portfolios where more than half of the companies hold patents, showing particularly strong engagement with startups filing patents.
The five most central investors in the European co-investor network are large public organisations specializing in technology funding:
- European Innovation Council (EIC)
- Innovate UK
- Eurostars SME Programme
- Bpifrance
- European Institute of Innovation and Technology (EIT)
Among the Top 100 are also pan-European public organisations, such as the European Investment Bank (EIB) and other national innovation agencies. Among private investors in the 100 most central positions, 62% focus on early-stage financing, while only 22% specialize in funding for mature stages, highlighting the limited capital availability in Europe for scaling technologies and commercializing inventions. In contrast, private investors represent 98 of the 100 most central investors in the US co-investor network, with over half specializing in mature-stage companies, reflecting stronger private support for scaling tech companies.
The United Kingdom, France, and Germany lead in overall funding and number of transactions, with a strong presence of technology investors.
Overall, these three countries had approximately 75,800 transactions, with a total funding of about 392 billion euros from 2000 to 2023, supported by around 6,100 investors with portfolios of at least 10 companies active in these three countries.
The Netherlands, Switzerland, Norway, Sweden, and Belgium also show high levels of investment supported by patents, with more than 24,400 transactions and nearly 88.5 billion euros during the same period. The remaining European countries collectively have more than 22,000 transactions and total funding exceeding 70 billion euros. All of this points to promising development potential in technology specialization.
Addressing the Funding Challenges of Startups in Europe
The comprehensive mapping of technology investors provided in the study is part of the EPO’s broader effort to support SMEs and startups across Europe.
As a complement to the study, the EPO updated the Deep Tech Finder tool with a new filter to discover investors. This will help startups find the most suitable investors for their specific company profile based on criteria such as type, country, or technology sector. This update enhances the capabilities of the Deep Tech Finder, a free tool that already allows users to easily find more than 10,000 European startups, spin-outs, and universities with patent applications at the EPO.
