The European Investment Fund (EIF) has announced that it will be working with the European Commission to provide €100 million in funding for blockchain and AI companies.
The EIF claimed that it was clear that blockchain and other emerging technologies, such as AI, would “change our lives”, but Europe’s part in this tech revolution would be restricted through lack of funding.
Discussing the need for a stronger European focus on DLT technology, the EIF wrote:
“Only a handful of closed venture capital funds deploy into the blockchain or other distributed ledger technology (DLT) spaces in Europe, compared to more than fifty such funds in the US.”
As a result, a significant amount of early-stage European companies receive funding from US investors, and many end up moving their operations there or being acquired by US firms.
Research and development
Western Europe does spend a lot of money on blockchain initiatives, the EIF claims, though much of this funding goes on research and development rather than later-stage funding.
European expenditure on DLT technology was the second highest in the world in 2019 at $674 million. The USA, on the other hand, spent $1.1 billion.
The EIF wrote:
“Despite the sums, much of the funding is directed at the research and proof-of-concept stage. When it comes to funding development on a larger scale, we just don’t do so much of it in Europe.”
To see companies through to a profitable and sustainable stage, more funding is needed for companies that are ready to deploy their product.
It’s this financing gap that the EIF aims to close. The EIF stated:
“The blockchain and AI ‘financing gap’ in Europe presents an opportunity for the EIF to support these new technologies through its existing and future venture capital networks.”
Closing the European DLT financing gap
In association with the European Commission, the EIF is allowing investment groups and venture capital groups to apply for fund matching on their investments.
Known as ‘cornerstone investments’, the EIF hopes that around €300 million of total investment will be generated from the scheme.
Whether this commitment will be enough to keep Europe in second place in terms of total blockchain funding is unclear.
China has recently reiterated its positive position on DLT technology, welcoming innovation in the space.
Some reports have claimed that over $2 billion will be spent on blockchain technology in China by 2023.
As a result, European groups may have to make significantly more DLT investments to remain competitive.
The post EIF announces €100 million blockchain capital fund appeared first on Coin Rivet.