Dr. Bertrand WertBusiness Acceleration Services &

Business Community Manager

bertrand.wert@ec.europa.eu

Twitter: bertrandwert

International IPR Stakeholders’ Meeting

The New EIC SME instrument

€ 3 billion in funding over the period 2014-2020

Innovative Idea

Test & Co-create

FeasibilityStart-up

Development Scale-up Investment

Future Emerging Technologies

FET OPEN

EIC Horizon Prizes:

Fast Track to Innovation

FTI Phase-1

SME-Instrument Phase-2

SME-Instrument

Soft Blending

Awarded to the most innovative solutions to societal challenges

Integrated offer along the innovation and

business development value chain

€ 500 million 2014-2020€ 1.5 billion

2014-2020

• Networking with top-level investorsand partners

• Support to product launch on International markets

• Business coaching of up to 12 days

• Support innovation capacity and strategic needs

• Phase-1 – 50.000€ for feasibility assessment

• Phase-2 – 0.5 to 2.5€ million for innovation development & demonstration

Equity Free Funding

World-Class Coaching Acceleration Services

Smart money for European Innovators

Great results achieved to date: 14 companies floating on the stock market, 29 acquisitions and a total of €1.3 billion of extra private investment leveraged

More figures and stories in the 2018 SME Instrument Report

Who are we looking for

✓ single companies (from EU and associated countries)

✓ disruptive innovation

✓ great management team

✓ clear ambition to scale-up

✓ all sectors, products, services, new business models

✓ demonstrated knowledge of the target market

✓ convincing commercialisation plan

The SME Instrument is valuable for European investors because it’s able to de-risk deep tech companies by validating their product on the market. It can bridge the gap between product validation and commercialisation, where private investors come in

Ewa Treitz, Black Pearls VC

Full bottom-up and introduction of interviews are the main new features of the evaluation under EIC Pilot

Responsibility

Applicants

H2020 Evaluation team

Experts

Below threshold(s)

Abovethresholds

Invited for interview

Not invited for interview

Proposed for funding

Not proposed for funding

Interviews: identify promising companies

Companies we are looking for

Highly innovative SMEs with ground-breaking concepts

Using three identification criteria

Implementation

Team's capability and motivation to bring the innovation to the market

Solid business model and commercialisation strategy Sound financial planning

Potential to create new market or significantly impact existing onesRight timing (i.e. feasibility)

Capacity to shape new markets or disrupting existing ones

High-growth potential with European and global ambitions

Impact

Excellence

• Corporate Days

• Trade fairs

• Investor matching

• EIC Community

• EIC Academy

EIC-SMEI Acceleration Services

The EIC Community

The new EIC Community is a comprehensive online platform designed to connect companies, investors and partners involved with the EIC pilot.

What can you find on the EIC Community?

• Get support from peers and the SME’s eco-system, overcoming physical distances.

• Share experiences and knowledge.

• Co-create knowledge.

• Explore business opportunities and expand your business network.

• Self-organise online events and learning opportunities.

• Get access to Business Acceleration Services, such as matching partners and investors

community-smei.easme-web.eu

SME Instrument in numbers

4129 beneficiaries

913 in Phase 2

1.64 billion in funding

5% - 8% success rate

Interactive map of the SMEI portfolio

https://sme.easme-web.eu/

SMEI beneficiaries by industry

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100

200

300

400

500

600

700

800

900

Health, Energy and Enterprise Softwareaccount for 55% of the SMEI portfolio

Beneficia

ries

Spain, Italy and the UK continue to have the highest number of SMEI beneficiaries

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100

200

300

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SME Instrument portfolio performance

29 acquisitionssince 2014

73% of acquirers

from Europe,

24% from

the United States

and 3% from Japan

14 IPOssince 2014 (95% on

European stock

exchanges)

~3 billionin post-SMEI

investments

10% of

European

tech IPOsin 2017

(according to

State of European

Tech report)

SME Instrument and private investment

Each €1of SMEI funding has attracted

€2.5of post-SMEI private investment

Portfolio highlights: IPOs

Company HQ Date Amount Stock Exchange

Immunovia Sweden Dec 2015 26 €m Nasdaq First North, Stockholm

Enertime France Jun 2016 4 €m Alternext (Euronext), Paris

Svenska Aerogel Sweden Dec 2016 Listing only Nasdaq First North, Stockholm

Finepart Sweden Dec 2016 1 €m AktieTorget, Stockholm

Biovica Sweden Mar 2017 1.4 €m Nasdaq First North, Stockholm

Mantex Sweden May 2017 5 €m Nasdaq First North, Stockholm

Bonesupport Sweden Jun 2017 50 €m Nasdaq First North, Stockholm

Portfolio highlights: IPOs

Company HQ Date Amount Stock Exchange

Brenmiller Energy Israel Jul 2017 10.7 €m Tel Aviv Stock Exchange

Klappir Iceland Sep 2017 7 €m Nasdaq First North, Stockholm

Senzagen Sweden Sep 2017 10 €m Nasdaq First North, Stockholm

Bioarctic Sweden Oct 2017 77 €m Nasdaq Stockholm (Main Market)

Arsanis Austria Nov 2017 35 €m Nasdaq Global Market, New York

Flexion Mobile United Kingdom Jun 2018 Listing only Nasdaq First North, Stockholm

Lifecare Norway Jul 2018 3.8 €m Oslo Stock Exchange (Merkur Market)

Portfolio highlights: Acquisitions

Company HQ Date Acquirer Acquirer HQ

Ubeeqo France Jan 2015 Europcar France

Multiposting France Oct 2015 SAP Germany

Funbricks Spain Jan 2016 Kao Japan

Fianium United Kingdom Mar 2016 NKT Photonics Denmark

Sividon Diagnostics Germany May 2016 Myriad Switzerland

ARCAM Sweden Dec 2016 General Electric United States

Xpand Biotechnology Switzerland Dec 2016 Kuros Biosciences Switzerland

GiGiGo Spain Feb 2017 Digital Dimension France

Amminex Denmark Mar 2017 Faurecia France

PayPlug France Apr 2017 Natixis France

Portfolio highlights: Acquisitions

Company HQ Date Acquirer Acquirer HQ

Finesse Medical Ltd Ireland May 2017 Avery Dennison United States

Carriots Sweden Jun 2017 Altair United States

Hydro International Ireland Jun 2017 BHSL Ireland

Comnovo Denmark Jul 2017 Linde Material Handling Denmark

Enza Biotech Sweden Jul 2017 Croda International Plc United Kingdom

PIDSO Austria Jul 2017 Riedel Communications Denmark

Digicash Payment Luxembourg Aug 2017 Payconiq Netherlands

Sigma Tau Italy Aug 2017 Alfasigma Italy

QuantumWise Denmark Sep 2017 Synopsys United States

Icar Spain Oct 2017 Mitek Systems United States

Portfolio highlights: Acquisitions

Company HQ Date Acquirer Acquirer HQ

EDS Ltd United Kingdom Nov 2017 James Fisher & Sons United Kingdom

Puridify United Kingdom Nov 2017 GE Healthcare United States

ElectRoad Israel Jan 2018 Biomedix Incubator Israel

Luxcel Ireland Jan 2018 Agilent United States

SENEC Denmark Mar 2018 EnBW AG Denmark

GeoLang United Kingdom Apr 2018 Shearwater Group Plc United Kingdom

Nextsense Austria May 2018 Hexagon AB Sweden

Spectral Engines Finland May 2018 m-u-t AG Germany

Amphiro Switzerland Jul 2018 Oras Group Finland

Post-SMEI private equity investments

€11m€151m

€440m

€1053m

€1746m

€0

€200

€400

€600

€800

€1000

€1200

€1400

€1600

€1800

€2000

2014 2015 2016 2017 2018

Millions

1.7 billion EUR in

post-SMEI private equity investments since 2014

Post-SMEI private investments

€0

€10

€20

€30

€40

€50

€60

€70

€80

€90

€100

Millions

Cyclical trendin post-SMEI investment with peaks in spring and autumn

Round types pre- and post-SMEI

440

245

33

88

193

29

Seed Early Late

Pre-SMEI Post-SMEI

Most post-SMEI investments are early stage

MeMed Diagnostics (IL)

https://www.me-med.com/

✓ Phase 2 in June 2015 2.9M€

✓ 63M€ Series A in September 2018

to upscale production and advance

market production

Point-of-need medical testsfor distinguishing between infection types

Ada Health (DE)

www.ada.com – ‘Alexa for health’

✓ Phase 2 in July 2015 2.4M€

✓ 40M€ Series A in October 2017

The future of healthcarelies in a much more patient-centric model

ICEYE (FI)

https://www.iceye.com/

✓ Phase 2 in June 2015 2.4M€

✓ 2.8M€ Series A in November 2015

✓ 34M€ Series B in May 2018

Global satellite monitoringfor accurate data streams on land and sea

Steeper Energy (DK)

https://steeperenergy.com/

✓ Phase 2 in December 2014 1.8M€

✓ 50.6M€ industrial plant partnership

with Silva Green Fuel (NO/CH) in

December 2017

Cost-effective biofuelsfor the heavy transport sector

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liaFast Track to Innovation

Fast Track to Innovation: objectives

Horizon 2020

participationPrivate investment

Co-creation and

innovation

Fast Track to Innovation: conditions

100 million / year No topic limitation

Max 5 partners 3 years to launch

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liaEnhanced EIC pilot2019-2020

An Enhanced EIC pilot for 2019-2020

Advisory Board

EIC

Pathfinder

Accelerator

Other actions

FET-Open

FET-Proactive

SMEI

Horizon Prizes

Exploratory and support

actions

Equity component (optional)-SPV-

Pro

gra

mm

e

managers

FTI

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liaEnhanced EIC pilot2019-2020

Back-up slides

Fab2Fight

Examples of SMEI post-grant investments

395 post-grant investments in 315 companies, including:

2.4m € grant in Jun 20152.8m € Series A in Nov 2015 + 34m € Series B in May 2018

1.1m € grant in Mar 201612.9m € Series A in Jan 2017 + 54m € Series B in Sep 2018

1.3m € grant in Mar 20164.6m € Series A in Jun 2017

Examples of SMEI post-grant IPOs

14 post-grant IPOs, including:

50k € grant in Jul 201577m € IPO in Oct 2017 (Nasdaq Stockholm)

50k € grant in Jun 201650m € IPO in Jun 2017 (Nasdaq First North)

4.2m € grant in Mar 201526m € IPO in Dec 2015 (Nasdaq First North)

Examples of SMEI post-grant acquisitions

29 post-grant acquisitions, including:

1.6m € grant in Aug 2015Acquired by General Electric (US) for 700m € in Aug 2016

50k € grant in Dec 2014Acquired by Mitek Systems (US) for 12.8m € in Aug 2016

2.4m € grant in Jul 2017Acquired by m-u-t AG (Germany) in May 2018 (undisclosed amount)

An Enhanced EIC pilot for 2019-2020

'The European Council invites the Commission to launch a new pilot initiative on breakthrough innovation within the remaining period of Horizon 2020. A European Innovation Council will be set up under the next Multiannual Financial Framework to identify and scale up breakthrough and disruptive innovation.'

European Council conclusions, 28 June 2018

Main objectives of an enhanced pilot are to

1.Support breakthrough innovation, complementing the longer term technological and sectoral strategies supported elsewhere in Horizon

2.Finance high risk innovations, which are too high risk for private investors or for financial instruments (future InvestEU, current EFSI, InnovFin and VentureEU).

3.Scale up the high potential innovative startups and SMEs in Europe, through providing higher levels of finance and connecting startups to EU wide ecosystems.

An Enhanced EIC pilot for 2019-2020

The Pathfinder:

- from early tech to early commercial;

- provides grants to high-risk cutting-edge projects exploring new territories aiming at developing radical and innovative technologies;

- encompasses FET-Open and FET-Proactive (as they run today);

- Both FET-Open and FET-Proactive will also benefit from the Business Acceleration Services

- it is a grant only instrument.

1. Reformed and simplified funding instruments, designed for breakthrough innovations from early stage (PATHFINDER) to development and scale up (ACCELERATOR).

TOPICS:

✓ Human-Centric Artificial Intelligence,

✓ Implantable autonomous devices and materials,

✓ Breakthrough zero-emissions energy generation for full decarbonization,

✓ Future technologies for social experience,

✓ Measuring the unmeasurable –– Sub-nanoscale science for Nanometrology,

✓ Digital twins for the life-sciences,

✓ The time of change,

✓ Environmental Intelligence.

In addition, an EIC Transition Activities Pilot is also foreseen, based on FET projects that have recently finished or are in the last year and have excellent innovation potential (specific areas to be determined).

An Enhanced EIC pilot for 2019-2020

1. Reformed and simplified funding instruments, designed for disruptive and breakthrough innovations from early stage (PATHFINDER) to development and scale up (ACCELERATOR).

The Accelerator:

- from early commercial to market deployment and scale-up [Technology Readiness Level (TRL) of 6 or above];

- aims at promoting co-investment by initiating the financial support where market response is absent and/ or insufficient;

- encompasses the SME Instrument [Phase 2 and 3];

- it is a grant instrument with an optional equity component (at least € 100 million coming from Access to Risk Finance).

To note:

✓ SME Instrument Phase 1 will be discontinued

✓ SME Instrument Phase 2 first 2019 three calls will not have the equity option.

✓ The Fast Track to Innovation and Horizon prizes schemes will continue under 'Other actions' of the WP.

Under the current (and future) legal framework, there is a need for a new entity to manage and deliver the equity participation.

Considerations are underway for the establishment of a Special Purpose Vehicle (SPV) by the summer of 2019.