Satellite Operator ICEYE Marks First Deal for Scaleup Europe Fund

The Scaleup Europe Fund has completed its first investment by co-leading a €450m investment in satellite imaging company ICEYE. The investment forms part of ICEYE's recently announced €1 billion financing round at a valuation exceeding €10bn.

Finland-based ICEYE owns and operates one of the world's largest synthetic aperture radar satellite constellations, enabling high-resolution Earth observation in all weather conditions, day and night. That gives governments and other customers timely, reliable, and actionable intelligence.

With a target size of €5bn, the Scaleup Europe Fund is designed to back high-potential European technology companies in sectors such as AI, space, clean energy, biotech, and advanced industrial technologies. It is the largest fund of its kind ever mobilized in Europe.

“ICEYE brings together four qualities we look for in exceptional growth companies: it combines leading technology, exceptional founders and clear strategic relevance for Europe, while already demonstrating global commercial leadership,” says Victor Englesson, Partner at EQT and Co-Head of the Scaleup Europe Fund.

Timely technology

ICEYE operates in an area of growing importance as governments look to strengthen the intelligence capabilities that underpin national security and defense. This priority has only sharpened in the current geopolitical environment, explains Englesson.

The satellite operator currently delivers end-to-end sovereign systems for seven European governments. The business has a substantial European footprint spanning Finland, Poland, Spain, Greece, Germany, and Portugal. Together, these qualities underline both the strength of its technology and the trust it has earned from customers.

"Europe has the talent, technology and ambition to build globally leading companies in strategically important industries. Our own journey reflects that,” says Rafał Modrzewski, Co-founder & CEO, ICEYE. “We are grateful for the European Commission's role in initiating the Scaleup Europe Fund and are pleased to welcome EQT as a long-term partner through the fund, as we continue to expand our sovereign intelligence capabilities from Europe for customers across Europe and globally.”

The transaction is expected to close subject to customary regulatory approvals and closing conditions.

Europe's widening growth capital gap

The Scaleup Europe Fund is designed to help plug the fundraising gap by providing European sourced growth capital to local ecosystems and some of Europe’s best companies scale on their own terms, without looking to Silicon Valley or elsewhere to succeed.

When European scaleups seek growth capital, they have increasingly looked abroad to find it. Between 2013 and 2023, 82 percent of scaleup deals in the European Union involved a foreign lead investor, compared to just 14 percent in San Francisco, according to the European Investment Bank (EIB).

The result is that Europe's most promising companies often end up absorbed into a non-EU based group or are listed overseas, most notably to the U.S. Such moves have economic costs for Europe in the form of an entrepreneurial brain drain and missed opportunities for local economies, the EIB writes.

The consequences of the existing financing infrastructure are tangible: in the last 50 years, the United States created 241 public companies worth more than $10bn from scratch. Europe created just 14.

“We are looking at more than 100 potential targets for the fund and see this first investment into ICEYE as an important step in building a portfolio that reflects Europe’s technological strengths,” says Engelsson.