The EU’s Startup and Scaleup Strategy Signals a New Era for Innovation
On May 2025, the European Commission launched the first-ever EU Startup and Scaleup Strategy, an ambitious, system-wide policy initiative aimed at making Europe the destination for starting and growing global technology-driven companies.
Startups and scaleups are more than economic engines; they’re the backbone of Europe’s competitiveness, digital and green transitions, and strategic autonomy. However, while Europe leads in early-stage innovation, too many startups struggle to scale or go global from within the EU.
This new strategy doesn’t just acknowledge the problem; it delivers a plan to fix it.
From Fragmentation to Integration: A Whole-Ecosystem Approach
The new Strategy, which aligns with the broader Choose Europe initiative, responds to years of fragmentation across finance, regulation, talent, and infrastructure. Its purpose is clear: empower founders, unlock investment, reduce red tape, and accelerate innovation throughout the entire lifecycle—from lab to unicorn.
To do this, the Commission has outlined five key pillars of reform:
1. Innovation-Friendly Regulation: Reducing Friction, Increasing Speed
Startups need legal clarity, not legal headaches. The strategy introduces:
- A new “28th Regime”: a harmonized EU-wide legal status simplifying incorporation, tax, and insolvency frameworks.
- A European Business Wallet: a digital identity for economic operators to streamline compliance and cross-border operations.
- Regulatory sandboxes: fostering experimentation with new technologies, while reducing the fear of non-compliance.
- The upcoming European Innovation Act: promoting pro-innovation policymaking and adaptive regulation.
2. Better Finance: Scaling Deep Tech with Deep Capital
Europe’s funding landscape remains skewed toward early-stage ventures—with scaleups often left in limbo. The strategy addresses this gap with:
- An expanded and simplified European Innovation Council (EIC), including more ARPA-like mechanisms for high-impact innovation.
- The launch of a Scaleup Europe Fund, targeting €50M+ rounds in deep tech, clean energy, and AI.
- A European Innovation Investment Pact, to mobilise institutional investors and pension funds into EU VC markets.
- Alignment with the Savings and Investment Union to unleash EU-wide investment flows into private startups.
3. Fast Market Uptake and Expansion: From Lab to Unicorn
Speed to market is essential. New initiatives aim to unlock growth with:
- The Lab to Unicorn program: creating Startup & Scaleup Hubs connecting research institutions and startup founders.
- New guidance on State aid for IP commercialization and licensing, reducing delays in technology transfer.
- A revamped focus on innovation procurement, encouraging governments to buy from startups and drive market validation.
- Better use of the European Unitary Patent System, launched in 2023, to reduce IP costs and simplify protection.
4. Support for the Best Talent: Attracting and Keeping Innovators
Talent is global and Europe wants more of it. The Strategy introduces:
- The Blue Carpet Initiative: focused on entrepreneurial education, easier tax treatment of employee stock options, and startup-friendly visa processes.
- Fast-tracking of the EU Blue Card for non-EU founders and talent.
- Improved cross-border employment and social security coordination to make European mobility a real advantage.
- Addressing gender gaps in technology and geographic barriers in talent flows.
5. Access to Infrastructure, Networks, and Services: Leveling the Playing Field
Startups often can’t access the infrastructure they need to prototype, test, or scale. That’s changing with:
- A Charter of Access for industrial users, simplifying how startups use research and tech infrastructures.
- Funding for AI Factories and AI Gigafactories, offering compute resources and model training environments to smaller companies.
- Streamlined access to Digital Innovation Hubs and single-entry portals for support services across the EU.
Progress, Measurement, and Accountability
To make sure words turn into action, the Commission will:
- Launch a Startup and Scaleup Scoreboard and Annual Survey, tracking global KPIs and regional progress.
- Measure the growth in startups, scaleups, centaurs (valued at €100M+), and unicorns (€1B+) in the EU.
- Publish a comprehensive implementation report by 2027.
Why It Matters: Europe’s Moment to Lead
This strategy lands at a decisive moment. With the US and China dominating late-stage capital and global scaling pathways, Europe’s innovators have often been forced to choose between growth and staying local.
Now, they may no longer have to.
With this Strategy, and the institutional muscle of the EIC, InvestEU, and new regulatory instruments, the Commission is turning its startup vision into executable policy.
Evolution’s Take: Bridging Policy and Execution
At Evolution, we’ve worked with hundreds of Europe’s leading startups and founders. We know the friction points. This Strategy tackles what the innovation community has been asking for: predictable rules, deeper funding, faster scale, and the freedom to innovate without leaving the continent.
We’re here to help you:
- Navigate the new Scaleup Europe Fund and public-private funding tools.
- Translate deep tech ideas into commercial scale via lab-to-market strategies.
Let’s make the most of this opportunity. Europe has chosen ambition. Now let’s build it.
