HELSINKI: Europe’s new €5bil (US$5.8bil) technology fund has disclosed that its first investment is in Finnish satellite company Iceye Oj, part of the bloc’s push to cultivate startups working on strategic technologies.
The European Union’s (EU) Scaleup Europe Fund, managed by Swedish investment firm EQT AB, co-led Iceye’s June funding round alongside US investor General Atlantic, said Victor Englesson, partner at EQT and the fund’s co-head, said in an interview.
Iceye raised €1bil from new investors as well as through a secondary placement in a round that valued the startup at more than €10bil.
The Scaleup Europe Fund contributed €300mil, participating in both the primary and secondary financing, according to a person familiar with the matter.
EQT and Iceye declined to comment on specific investor contributions.
Iceye is part of a crop of continental space tech firms that sprang up after Russia’s invasion of Ukraine, which prompted European nations to invest in faster, more agile space-based intelligence and communications systems.
The Scaleup Europe Fund picked Iceye, which makes surveillance satellites, to complement the bloc’s broader efforts to move away from a dependence on US tech.
The Finnish company hopes to list in Europe in future, chief executive officer Rafa Modrzewski said in an interview.
“Iceye has a lot of optionality, both private and public,” said Englesson.
The EU began discussions with prospective investors for its Scaleup Europe Fund last year, with an eye to backing startups working on quantum computing, artificial intelligence (AI) and other deep tech.
EQT won the mandate to manage the vehicle in May, focusing on private startups from Series B funding rounds onwards.
The continent has struggled to prevent some of its most promising technology companies from selling to overseas buyers or moving to the United States.
Advanced Micro Devices Inc agreed to buy Finnish AI lab Silo AI for US$665mil in 2024, while Apple earlier acquired Danish machine-learning company Spektral.
The conflict in the Middle East has further underscored the strategic value of sovereign space assets.
Governments are accelerating plans to build or secure access to their own satellite constellations, worried that reliance on foreign providers could leave critical data and communications vulnerable during times of crisis. — Bloomberg
