Discover the European Innovation Fund | with David Dana

Discover the European Innovation Fund | with David Dana

About the EIF & Team

How would you describe EIF and your investment thesis/guiding principles in one sentence?

The European Innovation Fund is fostering innovation with a sustainable and social impact across the European Union.

Can you tell us a bit about yourself, and key partners/experts in the team?  (It would be great to explain how your team is organized)

At the European Investment Fund, we encompass the full range of technology and innovation activities across Europe. I lead the Disruptive Technologies & Innovation department, focusing on deep tech areas such as new space, artificial intelligence, semiconductors, and defence. The EIF team is made of 50 experts with varied backgrounds, from engineering to seasoned generalists. This diversity ensures we approach each investment opportunity from multiple perspectives and thoroughly evaluate them before advancing in our process.

 EIF’s Investments in Funds

Can you give us the key characteristics of EIF’s investments?

At the European Investment Fund, we manage over 50 diverse mandates from governments, ministries, and regions, with a strong focus on investments that benefit the European Union and its VC ecosystem. Our primary mandates, notably from the European Commission and the European Investment Bank, require that at least two-thirds of each fund’s capital be invested in EU-based companies.

Moreover, we have recently introduced the European Tech Champion initiative, a significant €3.75 billion fund of funds set to be fully invested by 2027. This initiative is designed to bolster late-stage and growth-stage tech funds, aiming for target fund sizes of €1 billion to enhance the presence of EU entities in the growth tech landscape.

What do you look for in funds? /What will convince you to invest in a fund?

As the European Investment Fund nears its 30th anniversary with investments in over 700 VC funds, our interest in differentiation is key. We aim to invest in funds that offer more than just capital; they should provide a convincing value-add for outstanding entrepreneurs who are selective about their partners. 

Differentiation is vital and can appear in several forms, such as a fund’s specialized strategy, the team’s deep operational expertise, or strong network and connections within the industry. We rigorously evaluate each investment proposal, thoroughly understanding the fund’s model, its business plan, and the management company’s budget to ensure alignment with our strategic goals as well as a strong alignment of interest with the teams.

How do you assess and manage risk in your fund selection process?

We assess and manage risk through several key factors. First, we look at the market’s potential, including deal flow and opportunities for exits, ensuring the market is attractive with numerous active players and companies, combined with significant M&A activity. 

Next, we consider the management team, focusing on whether it is an established team with a proven track record or a new one with individual track records “only”. We evaluate the potential for their past successes to be repeated in future ventures. 

We also examine the legal and governance structures, and the financial details such as management fees, carried interest, and the managers’ financial commitments to the fund. 

Our approach is consistent, but each investment decision is made with a focus on selectivity and strategic investment, not just capital deployment.

Can you give a few examples of funds you previously invested in and why?

Over the past three decades, the European Investment Fund has made strategic investments in a diverse array of funds, each chosen for their unique potential to drive innovation and growth within the European ecosystem. Some examples include Alpine Space Ventures and Expansion Ventures, which we selected for their focus on pioneering technology in Space; Vsquared Ventures, recognized for its commitment to transformative deep tech startups; imec.xpand, chosen for its emphasis on semiconductors; and Matterwave Ventures, which invests in groundbreaking material science technologies. Each fund was selected based on its alignment with our strategic goals and its potential to contribute significantly to sector-specific advancements.

What tips would you give to GPs trying to get in front of institutional LPs?

Do not hesitate to reach out, regardless of whether you’re an emerging GP or managing a smaller fund. We are always open to conversations with new teams and value the fresh perspectives and opportunities they can bring.

What trends are you seeing right in new funds? And what do you think will be the next big thing in deep tech? 

In the past three to four years, we’ve observed a significant interest in space-focused funds, and this trend continues to evolve. Looking ahead, I believe that defence and security area will emerge as the next pivotal area in deep tech. These sectors are increasingly relevant across multiple domains, including space, manufacturing, and 5G technologies, positioning them as critical fields for future innovations and investments, and to ensure the technological sovereignty of the EU.

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