This presentation during the INTABA organised workshop, It describes the market failure in terms of investments in deep tech startups and SMEs in Europe. It provides an overview of the EU's investment program for AI and blockchain to support the early stage and scale-up of highly innovative startups and SMEs.

1. Fostering Investments in Artifical Intelligence
and Blockchain in Europe
Pierre Marro and Soren Gigler
Digital Innovation and Blockchain Unit
DG Connect, European Commission
Bjorn-Soren.Gigler@ec.europa.eu
Brussels
INATBA workshop
Sept 2020

2. Why Blockchain?
• New paradigms and collaborative models in the digital economy
(trust)
• Transformative capacities (e.g. disintermediation, tokenisation)
• Potential alternative model to dominant platforms or models
(decentralisation, trust protocols for linking data)
• Higher quality and efficiency (e.g. data mgt or integrity,
traceability)
• New opportunities that Europe must seize NOW
• Role for public bodies and the private sector
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3. Blockchain
Deployment in Europe
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4. Blockchain Exploration
Accelerates in Key Industries
Outside Financial Services
• As interest grows, blockchain is
moving rapidly in emerging
markets, in sectors beyond
financial services and in use
cases where use can be
mandated, and large
ecosystems are not required.
• In 2017, over 80% of reported
engagements were in the
financial services sector.
However, in 2019, these sectors
account for under 40%.
Gartner Report: Blockchain Evolution

5. From high potential through proof of
concept to successful use cases
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• Major actors from various
industrial sectors engaged in
projects and initial blockchain
based services
• Vibrant startup communities
• High interest in governments,
EU, national, local (cities)
• Value for customers, citizens

6. PUBLIC-PRIVATE PARTNERSHIP
SUPPORTING THE CREATION OF THE INTERNATIONAL ASSOCIATION OF TRUSTED BLOCKCHAIN APPLICATIONS [INATBA]; A
MULTISTAKEHOLDER ORGANISATION TO PROMOTE TRUST AND INTEROPERABILITY AT GLOBAL LEVEL
JOINED-UP POLITICAL VISION (EU-MS)
JOINT DECLARATION ON THE ESTABLISHMENT OF THE EUROPEAN BLOCKCHAIN PARTNERSHIP [EBP] AND THE DEVELOPMENT
OF THE EUROPEAN BLOCKCHAIN SERVICES INFRASTRUCTURE [EBSI] FOR CROSS-BORDER DIGITAL SERVICES OF PUBLIC
INTEREST
INVESTING IN EU RESEARCH, INNOVATION AND START-UPS
THROUGH THE CONNECTING EUROPE FACILITY AND H2020 PROGRAMMES, THE EU IS CO-INVESTING IN THE MOST ADVANCED
DIGITAL INFRASTRUCTURE AND THE MOST INNOVATIVE EU START-UPS
NEW EU INVESTMENT SCHEME FOR AI AND BLOCKCHAIN + SUPPORT PROGRAMME
CONNECTING GLOBAL and EUROPEAN EXPERTISE
THE EU BLOCKCHAIN OBSERVATORY AND FORUM BRINGS TOGETHER THE LEADING GLOBAL EXPERTS TO IDENTIFY
OBSTACLES, INCENTIVES AND PRACTICAL SOLUTIONS TO PROMOTE BLOCKCHAIN UPTAKE.
PROMOTING AN ENABLING DSM LEGAL FRAMEWORK,
INTEROPERABLE STANDARDS and SKILLS
DEVELOPMENT
EU Approach
EXPLORING - CONNECTING - SUPPORTING
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7. MANDATE OF THE EUROPEAN BLOCKCHAIN PARTNERSHIP
JOINT DECLARATION 10th OF APRIL 2018
SIGNATORIES AGREE TO ENGAGE IN
COOPERATION TO ESTABLISH A EUROPEAN
BLOCKCHAIN SERVICES INFRASTRUCTURE [EBSI]
Focus EBP
Policy engagement
The European Blockchain Partnership
27 MEMBERS STATES + NO and LICH
WORKING TOGETHER FOR THE DEPLOYMENT OF A EUROPEAN BLOCKCHAIN
SERVICES INFRASTRUCTURE (EBSI) AND CROSS BORDER USE CASE
WORKING TOGETHER ON OTHER BLOCKCHAIN ACTIONS LIKE LEGAL ASPECTS
and SANDBOX
TOWARDS GOLD STANDARD BLOCKCHAIN

8. 8
EU Blockchain Observatory and Forum
Achievements
EUBO&F 2.0
Start in June 2020, new consortium
Next workshop on 24 September on Health
Soon a 1rst « Thematic report » on Blockchain European ecosytems

9. INATBA
Industry engagement
Official launch in Brussels, 3rd April 2019
105 founding members www.inatba.org
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10. Why target AI & Blockchain
for investment?
• Foundational technologies that will underpin the future of
digital transformation across whole economy
• deep-tech
• at a stage of development where volumes of investments
make a difference
• embedding values of society
• Leadership role of Europe
• The EU has leading research, knowledge and talents
• High AI and Blockchain standards (data/privacy protection;
ethical guidelines and cybersecurity)
• Engine for innovation-led economic growth
• Role for public bodies and the private sector
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AI declaration joined
by all 27 Member
States and Norway
Blockchain declaration
with 27 Member
States, Norway and
Lichtenstein

11. Financing Digital Innovations
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Source: Innovative Finance Advisory Services, EIB

12. Investment gap in the EU
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Estimates consist of annual VC investment in AI-focused companies, PE
investment in AI-related companies, and M&A done by corporations. Source:
Capital IQ; Pitchbook; Deallogic; S&P; McKinsey Global Institute
“Overall Europe is behind in
private investments in
Artificial Intelligence”
AI strategy for Europe*
* COM(2018)/237
Total VC Investments in Blockchain
(2010-2018)
• North America: $5,1 billion (Canada: $623
Mill.)
• China: $1.5 billion
• Europe: $1,2 billion (CH:$414 Mill.&
UK:$312 Mill.)
• Global investment: $1.3 bill. (2018)

13. Investment Gap in AI and
blockchain
• Substantial market failure in financing of digital innovation
startups and SMEs in Europe
• Strong geographic concentration (innovation hubs in Europe)
• Highly risky investments (IP intensive, lack of collateral)
• Large investments and long-term financing needed
• Critical challenge to enhance access-to-finance for the scale-
up of innovative companies
• Despites current level of investments, it is not enough to enable
a broad adoption by EU businesses
• Many European companies obtain funding from non-EU VC
investors and start their businesses outside EU
Market related
challenges

14. AI/Blockchain Investment Fund
Investments in AI/Blockchain “made in Europe”
• Investment for start-ups, early and growth stages
• Total investments EUR 400-500 million (EUR 100 million EU
contribution in 2020)
• With ambitious objectives:
• Financing a portfolio of innovative AI/blockchain companies
• Developing a dynamic EU-wide investors community
focusing on AI
• Scaling up the volume of investments at the national level
by involving the national promotional banks (NPBs) that are
willing to participate
• Incentivising further private sector investments
• making Europe become more attractive for start-ups to
stay and grow
 Prepare future support through InvestEU Programme
(starting in 2021) 14

15. AI/Blockchain Investment Fund
Target: 1) SME & startups, for latest technology development as
well as applications adopting and scaling up AI/BT
2) AI and/or BT element is core for offering solutions
3) strong EU technology investor community (advice,
networking, management support, …)
Stage: early stage and growth stage
Instrument: existing instrument program managed by EIF
(InnovFin Equity Facility – EFSI SME Window)
Total Volume: EUR 400-500 m- leverage EU investments through
financial intermediaries (funds investing in AI &
blockchain)
Possible co-investments by Member States (MS)
A priority action for MS under the Coordinated Plan on AI

16. An AI/BT investment instrument
Where to focus public intervention?
• Development: Companies that develop generic AI/BT
infrastructures platforms and technology solutions that
enable the use of AI/Blockchain solutions across multiple
sectors
• AI/BT Applications: Companies that develop specific
AI/BT applications across a wide number of sectors, inter
alia mobility, energy, supply chain, certification and
traceability, health, regulatory reporting and government
services
• Convergence of AI and BT: Companies that develop
AI/BT solutions that are based on the convergence of
these technologies

17. Scaling up digital innovations in Europe
Objective: Improved access to finance for innovations
Type of
businesses
Type of
Investment
Innovative
(V)SMEs
& Start-ups
High-tech
(V)SME
& Scale-ups
Equity
(early
stage)
Equity
(growth
stage)
Applications
& Take-up
Leading
Technology
development
Investment Fund
for Artificial
Intelligence & Blockchain
Scale-ups

18. EU Investment Support Program
Enabling AI/Blockchain Ecosystems
• Rapid Market Assessment/ Market Consultations :
identify key investment gaps and geographic priorities
• Awareness Raising and Community-Building by
connecting innovators with investors
• Knowledge Sharing through a Massive Open Online
Course (MOOC) on digital innovations
• Matchmaking between AI/blockchain startups and finance
community
• Portfolio development of investment ready projects
• Investment Portal virtual marketplace for AI/blockchain
innovators, researchers, the VC community and investors
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19. Thank you!
• pierre.marro@ec.europa.eu
• bjorn-soren.gigler@ec.europa.eu
@EUBlockchain
•
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