ESCALAR - (developed together with the European Investment Fund (EIF))
Summary
Budget
Official information source
https://engage.eif.org/investeu/equity?overlay=ESCALARDescription
What is a scale-up?
An enterprise that has already established a product or service, and has already generated revenue, but may or may not be making a profit and needs financing to grow and expand.
This may include financing for increased production capacity, for market or product development, to provide additional working capital or to be used for a (total or partial) acquisition, with a view to further grow the business.
Why are scale-ups important?
Within the European entrepreneurial ecosystem, maintaining competitiveness and value via the support of scale-up enterprises is just as important as creating value through the support of start-up enterprises.
In fact, while scale-ups represent only a small percentage of the overall population of businesses in Europe, they contribute disproportionately to its economic and social welfare.
Yet a significant number of high growth European scale-ups have been acquired or forced to seek funding outside of the EU, due to the lack of suitable financing options within the EU.
What is ESCALAR?
First piloted under EFSI, ESCALAR has now been continued under InvestEU.
The ESCALAR mechanism is specifically designed to support scale-up financing. Unlike the standard direct pari-passu investment approach, ESCALAR proposes an asymmetric form of a share class or fund unit of the fund (or its side fund) benefiting from certain additional protections (via ESCALAR) that reduces both EIF’s investment risk and the EIF’s expected return, compared to other (riskier) share classes or fund units in the fund while providing higher upside return for such other share classes.
Who is it for?
ESCALAR is targeted at fund managers who have a specific investment strategy covering scale-up financing. Moreover, fund managers will need to be sufficiently experienced as well as have the ability to manage the increased risk capacity of ESCALAR - as well as having an extensive network to reach appropriate EU scale-up enterprises.
The Scale-ups supported under ESCALAR should be SMEs or Mid-caps established and operating in the EU or in OCTs of EU Member States
Find out more about the ESCALAR mechanism
Are you interested in learning more about ESCALAR, how it works and detailed terms and conditions?
Apply to InvestEU under the ESCALAR mechanism
Are you a fund manager with an investment focus on EU scale-ups, a proven investment track record and the ability to manage increased risk?
InvestEU Equity Product
For equity and private debt funds
The EIF has over 25 years experience in addressing SME financing gaps via investments in venture capital, private equity and private credit funds – and has made over €35bn in commitments in the equity space to date.
As an InvestEU Implementing Partner, we are charged with deploying a further €6.5bn to the market, with various policy priorities at the forefront of our investment strategy.
