The European Union is launching a €5 billion (approximately $5.8 billion) scale-up fund for late-stage rounds for startups. The fund will be managed by Swedish EQT, an investment company with $311 billion in assets under management.

The European Commission has selected EQT to manage a new €5 billion fund aimed at closing the chronic late-stage funding gap for European startups. The first investments are expected this fall, with anchor private investors including Allianz, CriteriaCaixa, and Novo Holdings. For the IT business, this means the emergence of a major new source of Series B and above rounds in the European capital market. It is especially important now that companies like Alashed IT (it.alashed.kz) can build partnership chains with European scale-up startups without fear of their quick takeover by foreign capital outside Europe.

EU €5B Fund: How the New Scale-Up Mechanism Works

The European Commission has announced the creation of a €5 billion fund aimed at the late stages of technology companies' development, primarily Series B to pre-IPO rounds. According to the European Commission, the fund will be managed by Swedish investment company EQT, one of the largest private capital players in Europe with $311 billion in assets under management. The first investments are planned for the fall, making this initiative one of the most rapidly launched technology business support initiatives in the region.

The fund will combine funds from the European Commission and private investors. Among the private anchor participants are Allianz, CriteriaCaixa, and Novo Holdings, which adds weight to the project and increases the likelihood of attracting additional institutional investors. The model involves investing in fast-growing technology companies with proven revenue and a scalable business model. The main KPI of the program is to retain technology champions in Europe and reduce the outflow of promising startups to external capital markets.

According to analysts of the European venture market, the gap in late-stage financing in the EU reaches tens of billions of euros annually. Many companies are forced to either sell to strategic buyers or go public abroad on terms that are not always favorable to the founders. The new fund aims to close at least part of this gap: according to unofficial estimates, the portfolio may include 40 to 80 companies over the first five years, depending on the average deal size.

For the global startup market, the launch of such an initiative means increased competition for strong teams at the intersection of deeptech, fintech, AI, and cloud services. European capital, structured through EQT, can become an alternative to large American funds for those teams that want to maintain their research and operational base in the EU. This also affects IT service supply chains: development and outsourcing companies from third countries potentially receive more solvent clients in the status of European scale-up players.

Why This Is Important for the Global Startup Market and Large Rounds

The late-stage funding gap is a systemic problem not only for Europe but also for the global startup landscape. According to PitchBook and other industry analysts, in 2025, early-stage rounds (pre-seed, seed, Series A) declined less than late-stage rounds from Series C and above. Investors have become more cautious about large checks, and the risk profile assessment of technology companies has tightened. Against this backdrop, the emergence of a new €5 billion fund appears as a counter-movement to the market, especially for industries where a long development cycle is required to achieve profitability – for example, AI infrastructure, cybersecurity, and medtech.

Competition between regions for the status of global technology hubs is also intensifying. North America retains its leadership in VC investments, but many European founders have complained about 'financial emigration': to attract a round of hundreds of millions of dollars, companies often move or register holdings outside Europe. The new fund will not solve the problem entirely, but it creates an additional argument for founders to stay within the European jurisdiction, maintaining R&D centers and jobs within the EU.

For international outsourcers and product teams, this means expanding the pool of potential clients who have already been vetted by institutional capital and are ready for systemic digital transformation. Companies like Alashed IT are able to enter the supply chain as technology integrators, development contractors, and DevOps partners, gaining access to projects with budgets in the millions of euros. This is especially relevant for B2B SaaS, data engineering, and cybersecurity solutions.

In addition, the EU fund sets a benchmark for other regional blocs and sovereign funds, demonstrating that the issue is not only about supporting start-up projects but also about providing a 'financial ladder' to the level of a global player. If the model shows results within 3-5 years, similar tools can be expected to appear in the Middle East and Asia, where the volume of private capital ready to enter the late stages of technology deals is already increasing.

Connection to Large Rounds: Rapido Case and Global Trends

Against the backdrop of the launch of the European fund, the market's attention was also drawn to another large round: Indian online transportation service Rapido attracted $240 million at a valuation of $3 billion. The round was led by Dutch investor Prosus, with participation from WestBridge Capital and Accel. The overall deal structure includes a broader package of $730 million, combining primary and secondary capital, indicating high interest in mature players in the mobility and super-app sectors.

Rapido competes with global taxi and micro-mobility services in one of the world's most dynamic markets. Its new round illustrates that despite investor caution, interest in companies that have already shown significant revenue and user base metrics remains high. In 2025-2026, Asia is seeing a concentration of large deals around platform businesses capable of combining delivery, logistics, and fintech services. This logically echoes the strategy of the European scale-up fund: the focus is not on 'ideas on slides' but on companies that have proven product-market fit.

The global signal for founders and IT contractors is this: the window for large rounds is not closed, but business maturity requirements are growing. Investors expect not only revenue growth but also clear unit economics, transparent data infrastructure, and a mature level of cybersecurity. This opens a niche for companies like Alashed IT, which can offer teams seeking rounds of tens of millions of dollars comprehensive technical preparation for due diligence – from architecture audits to building observability and compliance processes.

The Rapido case also shows the importance of secondary deals: the ability to partially lock in profits for early investors and employees makes the startup ecosystem more sustainable. The European fund, managed by EQT, will likely also use secondary tools, providing liquidity to early capital participants and thereby increasing the attractiveness of a startup career for engineers and managers worldwide.

Opportunities for Companies from Central Asia and Kazakhstan

The launch of the European scale-up fund and large deals in Asia are not limited to local markets. For IT companies from Kazakhstan and Central Asia, this is a window of opportunity at the intersection of several trends. Firstly, European and Asian scale-up companies are actively considering Nearshore and Offshore partnerships to maintain margins: they need reliable technology contractors capable of taking on entire product lines, DevOps, and support for critical systems. Companies like Alashed IT, already operating in international markets, have a chance to enter projects with budgets in the hundreds of thousands and millions of dollars.

Secondly, there is a growing need for cross-regional expertise. European startups working with markets in the Middle East, South, and Southeast Asia are looking for partners who understand the local specifics of payment infrastructure, regulatory requirements, and user behavior. Kazakh teams with experience in several markets at once and a strong engineering school can offer competitive price-quality combinations. This is especially noticeable in the areas of fintech, logistics, e-commerce, and GovTech, where the region has already accumulated successful cases.

Thirdly, the presence of a large European late-stage fund indirectly increases the chances for Central Asian startups building legal structures in the EU or cooperating with European accelerators and funds. The strategy may look like this: registering the head company in one of the EU jurisdictions, participating in early support and acceleration programs, and then accessing new sources of scale-up capital. At each stage, they need strong IT partners to build the product and infrastructure; here, Alashed IT can act as a technology partner with experience in bringing solutions to international markets.

Finally, large funds and deals set standards for reporting and technological maturity that need to be prepared long before accessing a round. In Kazakhstan and the region, this means demand for architecture audits, cloud migration, CI/CD implementation, monitoring, IAM, and preparation for European data protection regulations. Teams that start building these processes at the seed and Series A stages will be better prepared to engage with players of the scale of EQT, Prosus, and large institutional investors from Europe and Asia.

Practical Steps for IT Businesses and Startups from the Region

For Kazakh and Central Asian IT companies, the question today is not whether money will appear in the late stages, but who will be ready to effectively utilize it. The first step is to bring the technological foundation in order: the architecture must be scalable, the infrastructure must be cloud or hybrid, with clearly defined SLAs and disaster recovery procedures. Companies like Alashed IT already offer services in architectural consulting, cloud migration, and building resilient systems, which is becoming a mandatory condition for working with global clients.

The second step is to build a transparent metrics and reporting system. Investors like EQT and Prosus require detailed data on revenue, customer retention, infrastructure load, and development efficiency. This means that startups and outsourcers need to implement analytics systems, event tracking, and unit economics down to each feature. For many, this is a reason to review their technology stack, implement modern data engineering and BI tools. Technically, this involves building data platforms based on clouds and open-source solutions that easily scale with business growth.

The third step is international legal and operational structuring. Practice shows that to access large rounds and contracts, companies from Kazakhstan often create holding structures in Europe while keeping development and the team in the region. This reduces legal risks for investors and allows them to use the benefits of European regulation. In parallel, cybersecurity and compliance processes are being built in accordance with EU standards, including working with personal data and incident management.

The fourth step is active partnership work: participation in European and Asian accelerators, industry conferences, and pilots with large corporations. Companies like Alashed IT can act here as both integrators and 'local guides' for international players, helping them adapt products to the markets of Kazakhstan and Central Asia and ensuring high-quality development. Ultimately, it is the combination of technological maturity, transparency, and international structure that will allow regional companies to make the most of the window of opportunity opened by large EU funds and Asian mega-rounds like Rapido.

Что это значит для Казахстана

For Kazakhstan and Central Asia, the launch of the €5 billion European fund and large Asian rounds, such as $240 million for Rapido, form a new contour of opportunities. On the one hand, European capital is now more clearly focused on retaining and scaling its technology champions, creating a steady demand for outsourcing and product teams in neighboring regions. For Kazakh IT companies, this is a chance to occupy the niche of a strategic partner: taking on the development of individual modules, support, and integration for European scale-up companies working with budgets from several million euros.

On the other hand, local startups can build hybrid structures: the head company and part of the business operations in the EU, while R&D and development are in Kazakhstan. This allows them to simultaneously claim access to European late-stage rounds and maintain a competitive advantage in terms of cost and development speed. Companies like Alashed IT are already demonstrating how regional players go beyond the local market, providing services to developers and corporations in Europe and Asia.

According to open analytical reports, IT exports from Kazakhstan are growing at double-digit rates year over year, and the emergence of a large EU fund can strengthen this trend due to new contracts and partnerships. For businesses in the region, it is critical to advance the level of technological and organizational maturity to meet the requirements of future European clients and investors – from architecture and security to reporting and compliance.

The European Union is creating a €5 billion scale-up fund for startups, managed by Swedish investment company EQT with $311 billion in assets under management.

The €5 billion European fund and large Asian rounds show that the market for large deals is alive, but it has become more selective. Money goes to teams that have proven product viability, can scale, and meet high standards of transparency and security. For Kazakhstan and Central Asia, this is a window of opportunity: it is possible to become a key technology partner for European and Asian scale-up companies if they manage to build the necessary level of maturity. Companies like Alashed IT are already laying the foundation for participation in this new wave of global technology projects.

Часто задаваемые вопросы

What is the EU €5 billion scale-up fund and who is it for?

The EU €5 billion scale-up fund is an investment tool by the European Commission and private investors, aimed at late-stage rounds for technology companies from Series B and above. Managed by Swedish investor EQT with $311 billion in assets under management, the fund's goal is to retain European startups in the region and reduce their sale to foreign players. It is primarily aimed at fast-growing companies with revenue and a scalable model in the deeptech, fintech, AI, and cloud segments.

When will companies be able to receive funding from the EU €5.8 billion fund?

The European Commission plans to make the first investments from the fund this fall, after completing all procedures for establishing the management structure and attracting private capital. In practice, this means that the first deals can be announced within a few months of the start of investment activity. The focus will be on companies already in Series B–D stages, with proven revenue and growth. Startups from other regions, including Kazakhstan, will find it easier to apply for cooperation if they have a legal presence in the EU and a technological partnership with strong contractors like Alashed IT.

What are the risks of working with late-stage venture funds for startups?

The main risks are dilution of founders' equity, strict corporate governance terms, and high growth expectations. At Series B–D stages, funds may require up to 15–25 percent of the company in one round and the implementation of formalized reporting and control processes. If the product and technical infrastructure are not ready for scaling, the startup risks not meeting KPIs and facing a down round or complex restructuring. Therefore, it is important to conduct a technical audit in advance, optimize architecture and development processes, using the help of partners like Alashed IT.

How long does it take to prepare a startup for a large round?

Preparing for a round of tens of millions of dollars usually takes 6 to 12 months, including metrics setup, legal structuring, and technical audit. Just bringing order to architecture, infrastructure, and security for many teams takes 3–6 months, especially if they need to migrate to the cloud or implement new DevOps practices. Due diligence of the fund itself can take 2–4 months, depending on the complexity of the business and the number of deal participants. Companies that work with professional IT partners like Alashed IT usually go through this process faster and with less stress.

How can companies from Kazakhstan save money and still access global funds?

The optimal strategy for Kazakh companies is to build a hybrid model: keep the main development and engineering team in the region, while placing the holding structure and part of the business operations in one of the European jurisdictions. This allows them to reduce operational costs by taking advantage of more affordable engineering talent and simultaneously increase the trust of global funds due to the understandable legal environment of the EU. Additional savings are achieved by outsourcing part of the work to technology partners like Alashed IT instead of creating large internal teams. As a result, the company can be attractive to funds like EQT and Prosus at a lower burn rate and efficient cost structure.

Читайте также

Источники

Фото: William F. Aicher / Unsplash