Temasek Backs EQT’s European Tech Fund as Commitments Cross €3 Bn

Temasek, the Singapore state-owned investment company with a net portfolio of S$518 Bn, has invested in the Scaleup Europe Fund, a technology fund backed by the European Commission (EC) and managed by Swedish private equity group EQT. The fund has secured more than €3 Bn in commitments towards a €5 Bn target.

Temasek’s investment broadens its exposure to European technology companies as the region seeks to retain businesses that often turn to the US for growth capital.

Temasek confirmed the investment on October 20, describing itself as an early and key investor in the fund. But it did not disclose the size of its commitment, its share of the fund or the financial terms.

Backed by major institutional investors, the fund finances European technology businesses that have moved beyond initial development but need substantial capital to compete internationally.

EQT said on October 15 that the fund had secured more than €3 Bn in commitments and expected to meet or exceed its €5 Bn target. Fundraising will continue into the first half of 2027.

Nagi Hamiyeh, president of Temasek Global Investments, said Europe had strong innovation, industrial capabilities and entrepreneurial talent, but many promising companies lacked the capital to scale. However, Temasek had long supported deeper European capital markets and a stronger ecosystem for growing technology businesses.

The latest investment reflected the group’s confidence in Europe’s long-term prospects and its practice of investing both directly and through specialist fund managers.

Closing Europe’s Growth Capital Gap

Europe has little trouble starting technology companies. Its difficulty comes later, when those companies need rounds of $100 Mn or more to compete globally.

According to venture firm Atomico’s State of European Tech 2025 report, almost half the funding for Europe’s late-stage start-ups now comes from U.S. and Asian investors. Among companies founded in 2016, U.S. companies are twice as likely as their European counterparts to have raised $50 Mn or more.

The European Commission says no fund of comparable size has invested directly in European technology companies at this stage, pushing many to seek capital outside the region. It wants the Scaleup Europe Fund to reduce foreign investors’ dominance in these large rounds, which the EC links to strategic dependency, company relocation, foreign control and talent leaving Europe.

The fund sits within the European Innovation Council (EIC) Fund, the EC’s start-up investment vehicle, and is a key initiative of the European Union’s Startup and Scaleup Strategy. The EC has anchored it with €1 Bn. Other founding investors include Novo Holdings, Denmark’s EIFO, CriteriaCaixa, Santander’s Mouro Capital, Dutch pension fund ABP through APG Asset Management and Allianz, among others.

The EIC Fund Board picked EQT as manager in May after a competitive public call, and the fund was launched in June. It invests in privately held European technology companies from Series B to pre-IPO, in sectors including artificial intelligence, quantum computing, advanced industrial systems, semiconductors, clean energy, space technology, biotechnology and medical innovation.

Its cheques are meant to be much bigger than early-stage venture capital typically provides. The EC expects companies to receive around €100 Mn or more each, including follow-on funding, while EQT has outlined plans to back 30–40 companies, with individual investments ranging from €30 Mn to €300 Mn.

Although the EC is a major backer, EQT runs the fund independently and invests on commercial grounds, without direction from public sector investors. That independence matters to institutions such as Temasek, which invest for financial returns as well as exposure to European technology.

Seven Deals in a Quarter

The fund moved quickly once it began investing. According to EQT, the fund announced seven investments in the third quarter, and deal flow exceeded even its most optimistic assumptions.

Its first deal set the scale. In August, it co-led a €1 Bn financing for Finnish satellite intelligence company ICEYE, which included €450 Mn in primary capital at a valuation above €10 Bn. In September, it co-led the €3 Bn Series D of Paris-based AI model developer Mistral AI alongside the US growth investor PSG Equity. Samsung Electronics led the round, valuing Mistral at more than €21 Bn. Mistral described it as the largest equity round ever raised by a European technology company.

The fund also co-led a $450 Mn Series C for The Exploration Company, a Munich-based developer of reusable space capsules, alongside the US venture firm Bessemer Venture Partners and Atomico. Its other investments include Swedish AI software developer Lovable and clinical AI platform Tandem.

The pattern is telling. The fund has not displaced foreign investors from Europe’s biggest rounds. It has joined them as a co-lead, giving European capital a seat at the table where terms are set. It targets companies with proven technology that need substantial capital for their next growth stage.

Scaleup Europe Fund at a Glance

Scaleup Europe Fund	Key Facts
Manager	EQT, selected by the EIC Fund Board in May 2026
Anchor Investor	European Commission, €1 Bn
Target Size	€5 Bn
Commitments Secured	More than €3 Bn (as of October 15, 2026)
Fundraising	Continues into the first half of 2027
Launch	June 2026; first investment in August 2026
Stage	Series B to pre-IPO
Ticket Size	Around €100 Mn or more per company, including follow-on investments
Planned Portfolio	More than 40 companies, up from 30–40 at launch
Investments to Date	Seven in Q3 2026, including ICEYE, Mistral AI, The Exploration Company, Lovable and Tandem
Sectors	AI, quantum computing, advanced industrial systems, semiconductors, clean energy, space, biotechnology, medical innovation
Founding Investors	Novo Holdings, EIFO, CriteriaCaixa, Mouro Capital, APG (for ABP), Allianz, among others
Temasek	Early and key investor; commitment size undisclosed

Sources: European Commission, EQT, Temasek, EIFO

Note: The €100 Mn-plus figure is the EC’s expected investment per company over time.

Temasek Deepens Its European Investment Strategy

Europe is now the second-largest destination for Temasek’s capital outside Singapore. The group deployed about S$19 Bn (€13 Bn) across the region between its financial years 2024 and 2026. This put it on track to meet the lower end of the S$20–25 Bn investment target announced in 2024 for Europe, the Middle East and Africa (EMEA) by 2029. With three years to go, Temasek describes that pace as well ahead of its commitment.

For scale, Temasek invested S$51 Bn and divested S$31 Bn in the financial year to March 2026, a net investment of S$20 Bn, as its portfolio grew by S$49 Bn.

Valuations are part of the appeal. Temasek executives told Reuters last year that the valuation gap between European and U.S. companies made Temasek more confident about what it could achieve in Europe. Temasek has also argued that comparable businesses can trade at lower valuations depending on where they are listed.

Its European holdings span financial technology, infrastructure, AI and consumer businesses, from Dutch payments company Adyen and renewable energy platform Neoen to AI companies Mistral AI, AMI Labs, CuspAI and PhysicsX.

Temasek says it backed those AI companies early, with smaller tickets, and adds capital as they mature. The Scaleup Europe Fund invests at that later stage, and its co-lead role in Mistral’s September round gave Temasek exposure to Mistral both directly and through the fund.

Alongside direct stakes, Temasek has increasingly invested through specialist managers, and sometimes in the managers themselves. On September 28, it acquired a 9% stake in FSI’s management company. This Italian growth equity firm manages about €5 Bn in Italian mid-market businesses, and Temasek committed to investing in FSI’s future funds. The deal built on earlier investments in FSI’s funds.

The EQT commitment takes the same approach into larger European technology rounds, where a specialist manager can open up opportunities across markets and industries. It also comes as EQT broadens its institutional investor base and private market strategies, with the Swedish group reporting €354 Bn in total assets under management at the end of September 2026.

Temasek’s Portfolio Exposure by Geography (%)

Geography	2022	2023	2024	2025	2026
Singapore	27	28	27	27	27
China	22	22	19	18	17
India	6	6	7	8	7
Asia-Pacific (excl. Singapore, China and India)	12	11	12	11	11
Asia total	67	67	65	64	62
Americas	21	21	22	24	26
Europe, Middle East and Africa	12	12	13	12	12

Sources: Temasek Reviews 2025 and 2026; Temasek, September 9, 2026

Note: Figures show underlying exposure as of March 31 of each year. Temasek does not report Europe separately from the Middle East and Africa. The Asia total is an Entrepreneur APAC calculation and equals about S$321 Bn of the S$518 Bn portfolio in 2026, against about S$62 Bn for Europe, the Middle East and Africa. The latter’s share has held at 12-13% since 2022, even as Temasek deployed about S$19 Bn in Europe over the past three financial years.

The Exit Question

For European companies, the fund brings a homegrown investor among the leaders of their biggest rounds, a role often filled by U.S. and Asian backers. For Temasek, the fund offers exposure to 30–40 later-stage European companies, the stage at which the Singapore investor typically adds capital to businesses it first backed early. Temasek also gains EQT’s local networks and sector expertise, which the group looks for in its fund managers.

The harder test comes at exit. Europe generates 17% of new global enterprise value but captures only 10% of exit value, according to Atomico, while many of its most valuable companies list or sell abroad.

For the Scaleup Europe Fund to deliver for investors such as Temasek, its portfolio companies will need to grow into global leaders and find routes to listing or sale that keep more of that value in Europe.