Europe’s ambitious new investment vehicle has swung into action, with its first major deal landing in the space sector. The Scaleup Europe Fund, a public-private initiative targeting €5 billion ($5.7 billion), has co-led a funding round for ICEYE, a Finnish company that provides satellite-based intelligence services.
The announcement came just a day after the European Commission declared the fund fully operational, signaling a swift start to what officials hope will be a wave of investments in the region’s most promising technology firms.
Unlike traditional EU programs that distribute public money directly, Scaleup Europe is managed by EQT, a Swedish asset manager chosen through a competitive selection process. The fund is backed by a mix of institutional investors from across the continent, with the European Commission contributing €1 billion ($1.15 billion) as an anchor investment.
The fund’s mandate is broad, covering everything from deep tech and life sciences to clean energy and advanced manufacturing. But the first pick—ICEYE—highlights a particular focus on industries where Europe aims to maintain strategic independence.
ICEYE, now valued at over $11 billion, operates a constellation of small satellites that can capture radar images of Earth’s surface in any weather condition, day or night. This capability has made it a key supplier to governments and commercial clients alike.
In a LinkedIn post, ICEYE’s CEO Rafal Modrzewski said that space-based intelligence is becoming essential infrastructure for governments, and that the fund exists to help companies like his avoid having to relocate to compete globally. He emphasized the importance of European companies being able to scale up without leaving the region.
The investment comes at a time when European startups often struggle to secure late-stage funding, with many choosing to move to the United States or Asia to access larger capital pools. Scaleup Europe aims to change that by providing growth-stage financing for companies that might otherwise be forced to look abroad.
EQT’s CEO Per Franzén called the initiative a “big moment for Europe,” noting that while the region has proven its ability to create successful early-stage tech firms, the real challenge is turning them into global leaders while keeping their roots in Europe.
The fund’s founding investors include some of Europe’s largest financial institutions. Germany’s Allianz, Dutch pension fund manager APG, Spanish entities CriteriaCaixa and Mouro Capital, Italian foundations and banks such as Intesa Sanpaolo, and Danish investors EIFO and Novo Holdings have all signed on as backers.
EQT, which has ties to Sweden’s Wallenberg family, was widely seen as a front-runner to manage the fund. The firm has committed its own capital and will also help raise additional funds, with the goal of reaching the full €5 billion target.
Fundraising is expected to continue through 2027, and there are already discussions about opening a second round to non-European investors, provided they align with the fund’s strategic objectives.
Reports suggest the European Commission has floated the possibility of eventually expanding the fund to €25 billion ($28.9 billion), which would put it in the same league as major growth funds in the U.S. and Asia. Even at its current size, Scaleup Europe stands out in a region where most venture capital firms manage hundreds of millions, not billions.
The fund’s creation reflects a broader push by Brussels to strengthen Europe’s technological sovereignty and reduce dependence on foreign capital for critical industries. By partnering with private investors, the EU hopes to leverage public money to attract larger private commitments.
Some industry watchers have noted that the fund’s success will depend on its ability to move quickly and make smart bets. The ICEYE investment is a signal that the fund intends to back companies with clear strategic value, even if they operate in sectors that were not traditionally seen as European strongholds.
For now, the fund is just getting started, but its first move has already made a mark. Whether it can live up to its ambitious goals remains to be seen, but the early signs are promising.
