New EU ‘scale-up’ fund expects to burst past its €5bn target size

Good morning. Today, our technology and private equity correspondents reveal that the EU’s new scale-up fund is expected to raise more than its planned €5bn target, and the head of the International Energy Agency tells Mari that Brussels should rethink its opposition to Arctic oil and gas drilling.

Have a great weekend.

Scaled up

In an early sign of investor appetite for Brussels’ flagship Scaleup Europe Fund, the Swedish private equity firm EQT expects the vehicle to exceed its initial €5bn fundraising target, its chief executive told Barbara Moens and Alexandra Heal. 

Context: The Scaleup Europe Fund has been designed to invest in promising European companies in highly competitive sectors including artificial intelligence, quantum technologies and semiconductors, as the continent seeks to narrow the gap on tech development with the US and China. 

The European Commission is a founding investor in the fund, alongside private companies including Novo Holdings, CriteriaCaixa and Santander.

It is intended to address a longstanding European weakness: the shortage of large-scale growth capital that has pushed many successful start-ups towards US investors. 

Per Franzén, whose EQT has been selected to manage the fund, said investor interest has been “beyond what we had anticipated”, leaving the group “very, very comfortable about our ability to quickly and efficiently raise at least €5bn” and potentially more, although he declined to give an exact number. 

The Swedish executive struck an optimistic tone at a time when concerns over Europe’s competitiveness have dominated political debate following Mario Draghi’s landmark report.

He argued that Europe does not suffer from a shortage of promising businesses, but from a failure to help companies scale while remaining headquartered in Europe. 

Franzén said EQT was seeing particularly strong opportunities in AI infrastructure, AI applications and also life sciences and biotech. 

He argued that Europe had not missed its chance in artificial intelligence, particularly in the application of AI across the economy where he saw “amazing momentum across Europe”, pointing to companies such as Lovable and Parloa.

“There are many, many great examples of AI winners in the application layer. And we want to back those companies, we want to support those businesses [to] scale,” he said. 

Chart du jour: Watertight

Spain’s record-breaking World Cup defence is built not on sitting back but on “Cruyffian” possession, pressing and denying opponents the ball.

Drill baby, drill

The head of the International Energy Agency has urged Brussels to reconsider its opposition to Arctic oil and gas exploration, telling Mari Novik that Europe needs “every drop of oil from Norway”. 

Context: Brussels is considering dropping its moratorium on new Arctic drilling, a shift Norway has lobbied hard for as it recasts gas from the region as a strategic asset rather than a climate issue.

Fatih Birol, whose agency has become one of the world’s strongest advocates of the clean energy transition, said Europe would need “a lot of gas, a lot of oil” in the years ahead.

“The world is a very dangerous place now, and it’s getting more and more dangerous,” he said. “Europe is not an oil- or gas-rich continent. We will need in Europe a lot of gas, a lot of oil, and I hope that Europeans get this oil and gas from a country that they can trust.”

He added: “I support the Commission to give a very close look at [the moratorium], because it is extremely important for European energy security.” 

Jens Stoltenberg, Norway’s finance minister, reiterated Oslo’s position: “We don’t support the idea of banning oil and gas exploration in the Arctic as a general rule.”

The former Nato secretary-general added that “energy, economy and security are more intertwined than we have seen for decades”, arguing that Europe could no longer treat them as separate policy areas.

The Norwegian minister, who together with UK chancellor Rachel Reeves was invited to join a dinner last night with EU finance ministers ahead of a meeting today, said Oslo’s close integration with the EU through the European Economic Area had made it an indispensable partner on energy and security. 

“It’s hard to find any country in the world closer to the European Union without being a member,” Stoltenberg said.

Yet he ruled out reviving Norway’s own membership debate, saying Norway was “the only country in the world” to negotiate EU accession and then reject it twice in referendums, adding: “I was on the losing side both times.”

What to watch today

1. EU finance ministers meet in Brussels.

2. EU competitiveness ministers meet in Dublin.

Now read these

• Long journey: European low-cost pioneer easyJet, the orange upstart that changed flying, is set to go private in a buyout three decades after its launch.

• Assassin’s creed: A Ukrainian spy accused of killing a would-be hit woman has changed his story to blame his accomplice for pulling the trigger.

• Diesel crunch: The world is facing a growing diesel supply crisis after Russia cut off exports in response to Ukrainian drone strikes on its refineries.