The European Investment Bank (EIB) unveiled plans on Monday to help Europe retain its most promising tech start-ups through expanded funding options, as the European Union seeks to prevent innovative companies from relocating to the US in search of easier financing.

The initiative, presented to EU finance ministers in Luxembourg, includes measures to scale up venture capital investments and create new platforms for company listings, forming part of a broader strategy to deepen Europe's capital markets.

"We're talking about ensuring that European companies, technologies that are born in Europe, stay in Europe, and that we invest in Europe's champions, in Europe's unicorns, that we reinforce Europe's competitiveness through a stronger capital market," said Nadia Calviño, president of the EIB.

The bank's action plan includes expanding the European Tech Champions Initiative, a fund-of-funds launched last year that provides late-stage capital to European innovators. Additionally, the EIB is proposing a new "exit platform" to finance acquisitions and listings of tech start-ups by European firms.

The timing is crucial, as European IPO activity shows signs of recovery, with offerings raising $10.23 billion so far this year - a 65 per cent increase from the previous year. However, most successful share sales have come from established companies rather than growth-focused tech firms, which have typically remained private or considered US listings.

The initiative aims to address a significant investment gap in the EU, estimated at €800 billion ($879 billion) annually, according to a recent report by former European Central Bank president Mario Draghi. The strategy also aligns with Europe's broader goals of maintaining competitiveness against China and the United States, particularly in climate-friendly technologies necessary for achieving the EU's net zero emissions target by 2050.

"There's unanimous agreement at the technical level on the need to deepen Europe's capital markets and to reinforce the integration of our capital markets," Calviño added. "There is also political momentum right now."

The proposals will be finalised by the EIB's board of directors in partnership with the European Commission, following broad support from EU finance ministers at Monday's meeting.

---