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EUROPEAN EDTECH POLICY MAP

2.1. Policy and funding for EdTech providers

2.1.4 Align funding opportunities to fit the different innovation stages of EdTech companies, ranging from early-stage startups to scaleups 

Summary of suggested actions
Revise existing funding criteria to accommodate the diverse maturity levels of EdTech organisations, from early research and development (R&D) to scale-up—by introducing micro-tendering, micro-financing, and flexible evaluation frameworks that reflect the realities of educational innovation cycles and long procurement processes.
Description
The European EdTech ecosystem is composed predominantly of micro-enterprises and small and medium-sized enterprises (SMEs). Most operate within highly regulated, slow-moving education systems, facing long sales cycles (often 9–24 months) and complex procurement processes that differ widely between Member States. Yet, existing funding instruments—both at EU and national level—are often designed for traditional industrial sectors or large-scale technology firms, making them poorly suited to the iterative, experimental, and service-driven nature of EdTech innovation.
To sustain a diverse and innovative EdTech ecosystem, funding and evaluation mechanisms must be aligned with different innovation stages: early-stage R&D, pilot and validation, scale-up, and internationalisation. Each stage requires distinct forms of financing, risk assessment, and evidence criteria.
Early-stage EdTech innovators, for instance, often lack the financial resources to meet co-funding or private-match requirements in EU or national programmes. Mid-stage companies need support for testing, evidence generation, and regulatory compliance (e.g. GDPR, accessibility, and ethical AI). Later-stage companies, by contrast, require export and scale-up funding to reach new markets.
Aligning funding structures to this lifecycle will help ensure that public support mechanisms foster continuous innovation rather than inadvertently favouring larger, well-capitalised players. It will also increase the diversity of EdTech providers contributing to Europe’s digital sovereignty and educational goals.
Major enabling factors

  • Stage‑mapped runway: Sequence national grants/loans (e.g., preseed - R&D grant - scale loan) against clear technical and market milestones.

  • Early customer proof: MOUs with schools/districts, letters of intent, and small paid pilots to de‑risk market assumptions.

  • Compliance pack: Reusable artefacts (e.g., Data Protection Impact Assessments (DPIA) template, privacy by design notes, model Data Processing Agreement (DPA), security controls, accessibility statement).

  • Match funding strategy: Blend small equity, revenue finance, or regional vouchers to meet co‑financing without over‑dilution.

  • Impact logic: Simple logic model linking learning outcomes, evidence plan, and business metrics to strengthen evaluation criteria.

Major roadblocks
  • Many schemes require 20–65% private match; early teams often lack eligible capital or in-kind contributions.
  • Existing funding criteria assume mature business models or large-scale studies, excluding early-stage educational pilots.
  • Extensive reporting, auditing, and eligibility documentation discourage small teams from applying.
  • In EdTech, data protection, safety and procurement requirements (e.g., DPIA, security, accessibility) are under-documented.
  • Education sector procurement timelines (often exceeding one academic year) are rarely reflected in funding or repayment schedules.
Suggested action 1: Adapt EU and national funding procedures to reflect EdTech innovation stages
WHO (Potential actors)
European Commission funding programmes, national innovation and procurement authorities, EdTech alliances, and SME financing agencies relevant to EdTech startups, in cooperation with national procurement authorities and EdTech industry networks
 
WHAT (Goal of suggested activities)
Ensure that EU and national funding procedures accommodate the diverse maturity stages of EdTech companies and the specific characteristics of the education market, including longer validation and procurement cycles (e.g., 12-36 months) in funding timelines and expectations
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HOW (Suggested activities)
  • Introduce micro-procurement or micro-purchasing models with lower financial thresholds to allow smaller EdTech providers to participate in public tenders.
  • Revise evidence requirements so that impact can be demonstrated through proportionate, context-appropriate data rather than large-scale longitudinal studies.
  • Pilot micro-financing schemes linked to evidence generation, with funded companies sharing anonymised impact data to enhance the European EdTech evidence base.
  • Adjust funding timelines to account for extended school procurement and implementation cycles
Existing steps in the right direction
Public funding to support early-stage EdTech companies (Belgium)

Support for innovative starters
Belgium offers government-backed co-financing initiatives enabling early-stage EdTech startups (typically under five employees) to match public funding with private investment. This structure reduces financial risk and supports sustainable scaling. The scheme aligns financing with early innovation maturity, allowing companies to test and refine their products before seeking larger-scale investment

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Specific support required to achieve the Goal: 

To take this further than a single country initiative, further EU coordination, for example, under the Digital Europe Programme and InvestEU SME Window, could be provided.

Suggested action 2: Create EU funding streams dedicated to early-stage EdTech R&D
WHO (Potential actors)
European Commission (DG RTD, DG EAC, DG Connect), Horizon Europe, national innovation agencies, and EdTech industry associations.
 
WHAT (Goal of suggested activities)
Establish dedicated EU funding lines for early-stage EdTech R&D and experimentation, building on existing national practices and promoting collaboration between research organisations and SMEs.
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HOW (Suggested activities)
  • Allocate specific EdTech R&D budget lines within Horizon Europe Cluster 2 and Cluster 4 work programmes.
  • Support regional and cross-border testing centres (see Goal 4, “Sustain and expand testing environments”) to validate EdTech tools and services in real educational contexts.
  • Fund knowledge-exchange and mentoring networks linking universities, EdTech startups, and investors.
  • Provide targeted grants for IP protection and ethical compliance, ensuring early-stage developers can manage privacy and safety requirements from inception
Existing steps in the right direction
Business Finland

Business Finland funds collaborative projects between companies and research organisations to generate knowledge and innovations forming the basis for future international business. The programme encourages early co-creation between EdTech developers and universities. This model shows that dedicated R&D funding for SME–research collaboration can accelerate the translation of pedagogical research into market-ready innovation.

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Specific support required to achieve the Goal: 

Equivalent co-innovation schemes could be established across Member States and at EU level under Horizon Europe or Digital Europe, explicitly targeting education technology.

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