By Karthek Iyer

Funding has been one of the biggest challenges for European startups and early-stage funding has been a bigger challenge.

With more new first-time founders being minted in Europe than in the US, new avenues to raise funding are always welcome. One such funding vehicle is Mastercard’s Strive EU Innovation Fund.

The Strive EU Innovation Fund is a brand-new initiative that aims to accelerate the development of solutions aimed at supporting European small businesses on their digital journey.

What is the Strive EU Innovation Fund?

Strive EU Innovation Fund

Small businesses have always been the backbone of the European economy and their relevance and success are more important than ever for the continent.

However, their success and growth are often hindered by the lack of solutions designed primarily to support these small businesses.

With the Strive EU Innovation Fund, Mastercard aims to turbocharge the development of solutions for European small businesses in the areas of embedded finance, cybersecurity, AI, and environmental sustainability.

Mastercard introduced its global Strive programme in 2021 as a portfolio of philanthropic programmes aimed at supporting more than 10 million small businesses around the world to thrive in the digital economy.

The Strive EU Innovation Fund is the first dedicated activity for Strive EU, which was launched in the European Parliament in November last year and will be implemented by Caribou Digital.

Through the Strive EU Innovation Fund, Mastercard will support up to 20 winners from EU member states with equity-free grants of up to €500,000 to validate and develop their solutions over 12 to 18 months.

The size of each grant will range from €100,000 to €500,000 and for those applying for €250,000 and above, a minimum of 10 per cent match funding is required.

Are you building a digital and data-first solution to support small businesses in Europe? Click here to apply for the Strive EU Innovation Fund with grants up to €500,000.

Strive EU Innovation Fund: What is the timeline?

The application for the Strive EU Innovation Fund began on January 23, 2024, and applications close on March 11.

“We are excited to open the application window for the Strive EU Innovation Fund and to hear about some of the best projects coming from Europe’s most innovative minds over the coming months,” says president of Mastercard Europe Mark Barnett,.

The winners of the Strive EU Innovation Fund are required to validate and develop their solutions over the following 12 to 18 months.

Who can apply for the Strive EU Innovation Fund?

Startups, established companies, nonprofits, or social enterprises of all sizes can apply for the Strive EU Innovation Fund. However, government entities and academic institutions are not eligible for this grant.

All the applicants must be registered and operating in at least one of the 27 EU member states. Organisations can also apply as a consortium with other organisations but the main applicant should be based in the EU.

The applicants must build digital and data-first solutions for small businesses (with fewer than 10 employees) as their customers or end users.

Those applying for the EU Innovation Fund must be at least in the Product Definition stage and must not focus on capacity building.

Last but arguably the most important criteria is that they must align with one of the four themes: embedded finance, cybersecurity, environmental sustainability, and AI (details below).

Four themes of Strive EU Innovation Fund

The Strive EU Innovation Fund not only aims to support European small businesses on their digital journey but also does that through four unique themes. While the grant is not limited to the specific digital solutions mentioned below, the Innovation Fund is seeking solutions that fall within these four areas:

Unlock working capital and credit through embedded finance

The Strive EU Innovation Fund observes that Europe’s small businesses are currently facing a high need for financing. Their working capital requirements have increased but access to affordable financing has been limited. Mastercard Strive sees embedded finance as a solution where a small business owner can get access to a financial product through a nonfinancial platform. The fund is looking for solutions that increase small business owners’ willingness to trial embedded financing offerings or use alternative data sources to extend credit or working capital to small businesses.

Go digital safely by bolstering cybersecurity

While the lack of digital infrastructure has hurt European small businesses, only one-third have made it a priority and 28 per cent attribute it to their lack of expertise in cybersecurity. The Strive EU Innovation Fund is looking for digital solutions that address the cybersecurity challenges of small businesses. These solutions can offer risk assessment, detection and protection for enhanced cyber resilience, and cyber risk mitigation.

Navigate evolving consumer preferences and regulatory expectations around environmental sustainability

With small and medium-sized businesses accounting for 40 per cent of business-generated greenhouse gas emissions in the EU, the third theme is all about sustainability. The innovation fund is seeking digital solutions that primarily help small businesses with increased ESG transparency to meet the changing consumer demands. The innovations could include regulatory compliance solutions, automated compliance solutions, collaborative compliance solutions, and other solutions that help small businesses invest in green business models and differentiate by creating green industry products and services.

Harness AI to save time and make more money

The last theme aims to harness AI to enable small businesses to reduce their administrative burden and optimise their operational efficiency. The Strive EU Innovation Fund is seeking out digital solutions that equip small businesses with responsible and trustworthy AI strategies and solutions. In other words, AI solutions that can help small businesses boost their revenues and competitiveness, get better access to financial services, offer customised experiences to customers, detect fraud, and enhance diversity,equity, and inclusion strategies, are encouraged.