The European Investment Bank (EIB) is a major multilateral financial institution that offers tailored venture debt instruments to support startups, SMEs, and small mid-caps in scaling their businesses and driving innovation across Europe. These financing solutions target the funding shortfalls of high-risk, high-potential innovations within critical sectors like digital, deep tech, clean tech, and biotech.

In an online webinar on 21 February 2025, the EIB venture debt team discussed how these financing instruments can complement existing funding, facilitate larger investment rounds, and enable business expansion into new markets. Here's a summary of the most important takeaways. 

What is EIB venture debt?

EIB venture debt is a powerful tool for scaling innovative companies while minimising dilution. It offers flexible funding, credibility, and strategic alignment with growth milestones. The EIB participates in the company's upside through a warrant component, thereby avoiding direct equity participation. Hence, it’s an attractive financing option for companies with strong long-term potential.

Keep reading to learn more about this opportunity!

On eligibility

The EIB provides venture debt, a form of direct lending, to fuel the growth of innovative companies based in the European Union, Iceland, and Norway. 

The Bank explicitly targets Series B+ companies and selectively Series A companies with exceptional potential. It supports businesses with strong growth trajectories and a well-defined path to revenue generation. 

The investment focus spans critical sectors driving future economies, including clean tech, mobility, the circular economy, deep tech, life sciences, and low-carbon solutions. Thus, it fosters sustainable and technologically advanced development across the region.

Key features of venture debt

The EIB's venture debt offerings feature ticket sizes ranging from €15 million to €50 million, strategically released in smaller portions at specific points in time, and those releases are directly linked to the company achieving certain milestones. What’s important is that EIB’s venture debt can be used alongside EIC funding and equity investments.

The debt structure incorporates a warrant component, offering upside potential without diluting existing equity through conversion. Thus, warrants do not convert the debt into equity. Instead, they track the company’s value as compensation for the risk taken by EIB. The warrant size is determined based on the company’s maturity and risk profile – riskier, earlier-stage companies require higher warrant coverage.

For example, if a company is valued at €100 million pre-money, and EIB provides a €20 million loan, the warrant coverage is calculated as a percentage of the post-money valuation.

The EIB monetizes the warrants after 5-7 years, usually by selling them back to the company at fair market value. If the company lacks liquidity, EIB explores market sales or monetization via mergers and acquisitions.

Additionally, the EIB offers repayment flexibility, using bullet structures for a lump sum payment at maturity or milestone-based repayments aligned with company progress. This approach minimizes dilution for founders and existing investors compared to equity funding. 

The rigorous due diligence conducted by the EIB lends significant credibility to recipient companies, enhancing their ability to attract subsequent investors and secure further funding.

Application

Securing EIB venture debt typically takes 6-9 months from the initial application to the final disbursement. To start the process, applicants must provide a comprehensive Investor Deck and a clearly defined funding request. 

Find out more about the application process and submit your application via the EIB venture debt webpage.

About the EIC Scaling Club

The EIC Scaling Club is a curated community where 120+ European deep tech scale-ups with the potential to build world-class businesses and solve major global challenges come together with investors, corporate innovators and other industry stakeholders to spur growth.

The top 120+ European deep tech companies will be carefully selected from a pool of high-growth scale-ups that have benefitted from EIC financial schemes, other European and national innovation programmes, and beyond.

The EIC Scaling Club is an EIC-funded initiative run in partnership by Tech Tour, Bpifrance (EuroQuity), Hello Tomorrow, Tech.eu (Webrazzi), EurA and IESE Business School.

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