The 2018 SME Instrument Impact Report is out! Here are the key takeaways from it

The SME Instrument 2018 Impact Report is out and since it contains many interesting insights into one of the most popular and essential players on the European innovation scene, we thought we should give you the main highlights.

First of all, since the start of the program in 2014, the SME Instrument now has received over 47 000 applications with 3200 SMEs supported and over 1.3 Billion of funding. There are 1.7 Billion until 2020 left for SMEs and startups so we expect the figures to double in the next 2-3 years.

If you never heard about the SME Instrument, read the “About” section below first.


Without further ado, here are the main findings:


  • It’s a good time to be a startup

Most SMEs participating in the SME Instrument are both small and young. A little over half (57%) are micro companies with less than 10 employees. This is a more pronounced trend in Phase 1, where 61% of all participants are micro companies


  • The SME Instrument had a strong leverage effect

Four years after the start of the programme each €1 invested by the SME Instrument generated €1,6 of private investment.

Additionally, the SME Instrument speeds up time-to-investment: before obtaining SME Instrument funding, companies needed on average 18 months to get the next investment compared to only 9 months after the grant.


  • 51% of applicants come from only 4 countries

51% of all SMEs participating in the SME Instrument are from Spain, Italy, the UK and Germany, while SMEs from Iceland, Switzerland, Ireland, Austria, and Denmark are the most successful in applying for the program.


  • Low acceptance rate (although depending on what you’re comparing it with)

Only 8.0% of Phase 1 applications and 4.8% of Phase 2 applications were selected for funding. The numbers can be discouraging although, acceptance rate is actually a bit higher than those in private acceleration programmes according to the report.


  • Most applications are resubmissions which proves to be a good idea

The SME Instrument allows companies to re-submit their applications for funding and get the same treatment as first submissions. Over the last two years, around 50% of proposals in Phase-1 and around 60% of proposals in Phase-2 were resubmissions. In Phase 1, re-submitted applications have almost 50% more chances to get selected, while in Phase 2 chances for resubmitted applications are slightly higher (around 5%). This is because applicant SMEs learn from the process and can re-submit improved proposals based on the feedback received at the end of the selection procedure.


  • It stimulated the innovation capacity of startups and SMEs

Companies were asked if winning Phase 1 and Phase 2 enhanced their innovation capacity and the vast majority of companies said a resounding YES, in particular when it comes to “Better understanding of clients’ needs”, “Better understanding of technical issues”, “Increased reputation/visibility of the company”, “More strategic approach for identifying risks and risk management”, “Better knowledge about marketing methods” and “Better knowledge about competitors”.


  • There’s more:

  • Most of the funded companies are active in medical/healthcare, cleantech and energy industries;
  • Manufacturing (sale of produced goods) is the most common revenue model for SME Instrument companies;
  • 76% of SME Instrument companies address B2B users;
  • Only 15% of selected projects are coordinated by women.


Feel free to delve into more details from the SME Impact Report Executive Summary or here, the long version of the report.


If you want to access a part of the €1.7 Billion left in EU Funding for SMEs, our team can help you get up to €2.5 Million equity free funds! We provide a funding strategy tailored to your development schedule and positioning and by using a combination of funding schemes to lower the risk, maximise the number of submissions and placing all odds on your side, which will eventually make you successful.

You can check if your startup is eligible for any of the EU funding schemes and we will get back to you in no time by filling our “Eligibility Form”.


About EU Startup Services

EU Startup Services is the leading EU funding consultancy for startups in Europe. Our expertise on EU funding schemes includes the Horizon 2020 SME Instrument Phase 1 and 2, Fast Track to Innovation (FTI) and Eurostars.


About the SME Instrument

The European Union allocated €3 billion until 2020 for innovative startups and SMEs. The programme is looking to support breakthrough, high-risk – high potential innovation to help them reach the market and compete on the international level. The “SME Instrument Phase 1” grants €50,000 and the “SME Instrument Phase 2” provides funding from €500,000 up to € 2.5 million for innovation projects underpinned by a sound and strategic business plan. More about the SME Instrument here.


Author: Dan Stanciu


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