EIT Manufacturing, an EU-backed initiative, collapsed after liquidating, leaving over 200 startups without promised €500k grants. The body, launched in 2019 to digitize Europe’s industrial sector, faced frozen funds in 2024 due to an OLAF investigation into mismanagement allegations. A spokesperson confirmed the probe uncovered “serious irregularities” in documentation between 2020-2022, though leadership claims reforms have modernized operations.**

The EIT froze funding in June 2024, halting €163m earmarked for EITM. Despite new governance structures, a February investigation revealed “irregularities beyond initial findings,” per EIT. Startups now face uncertainty as EITM applied for a bank loan, contingent on EIT’s support—a request denied due to unresolved compliance issues. Over 100 companies remain in limbo, with EITM CEO Caroline Viarouge calling the situation “unnecessarily fragile.”

EIT insists other KICs like EIT Digital and EIT Health remain unaffected, but critics argue the framework lacks stability. The EU’s proposed 2028-2034 budget omits direct EIT funding, redirecting €38bn to the European Innovation Council instead. Viarouge urged a “simplified, transparent framework” for KICs, warning of long-term damage to innovation ecosystems.

**EIT’s spokesperson emphasized “robust performance” of other KICs but acknowledged EITM’s unique challenges. Startups and investors now face delayed projects and lost momentum, highlighting systemic risks in EU-funded innovation programs. The fallout underscores tensions between bureaucratic oversight and agile startup support in Europe’s tech landscape.