In 2025, FinTech companies across Europe and beyond face an important choice when seeking public funding: should you apply for EU grants under Horizon Europe or Digital Europe, or pursue EU tenders through procurement platforms like TED? Both are powerful opportunities, but each comes with very different requirements, risks, and rewards.
Understanding EU Grants
EU grants, such as those available through Horizon Europe and the Digital Europe Programme, are designed to support research, innovation, and deployment. Grants are particularly attractive for SMEs that are developing new technology, intellectual property, or pilots that require proof of concept at a European scale.
These grants are non-dilutive, meaning you don’t give away equity, but they often require co-funding (e.g., 70% covered for some innovation actions, 100% for research). They also typically demand international partnerships, where multiple countries collaborate on a single project.
The big advantage of grants is that they allow you to retain ownership of your intellectual property while receiving EU-backed funding. However, the trade-off is heavy: proposals are lengthy, competition is intense, and the evaluation-to-funding timeline can stretch over months. For SMEs with longer runways and a focus on innovation, grants are ideal.
Understanding EU Tenders
EU tenders, by contrast, are part of the public procurement process. Governments and institutions publish clear specifications for a product or service they want delivered, and companies bid to win the contract.
Unlike grants, tenders are about implementation and delivery today—not long-term research. Winning a tender means signing a contract that pays against milestones or deliverables, making it closer to direct revenue than research funding. For FinTech SMEs with ready-to-deploy solutions in payments, fraud detection, digital identity, or compliance, tenders are often the faster route to market.
The trade-off is that tenders usually give you less freedom over the product and may limit IP ownership, as the contracting authority often takes rights over the solution. However, tenders can provide predictable revenue, high-profile references, and fast cash flow.
When to Choose Grants
Grants make sense if your solution is still being developed or requires pilot testing. For example, a startup working on AI-driven fraud detection or new digital identity standards could secure Horizon Europe funds to test and validate technology in multiple markets before launching commercially.
Grants are also ideal if you want to collaborate with universities, research centers, or industry leaders, since consortium projects are the norm. They offer credibility, R&D backing, and networks that can later open procurement doors.
When to Choose Tenders
Tenders are the right path if your product is market-ready and you can meet strict technical and compliance requirements. A FinTech SME that has already built a SEPA Instant payments integration or AML transaction-monitoring platform could bid on a national or EU-wide tender and begin generating revenue quickly.
They are especially useful for SMEs wanting to build a portfolio of public-sector references, which can later unlock more private contracts or cross-border opportunities.
Special Middle Ground: PCP & PPI
Two hybrid models blur the line between grants and tenders:
- Pre-Commercial Procurement (PCP): Public buyers fund R&D services in phases. Here, suppliers often keep their IP while authorities get usage rights.
- Public Procurement of Innovative Solutions (PPI): Buyers co-fund deployment of innovative but market-ready products, helping suppliers gain traction.
These are great opportunities for FinTech firms that are ready to test advanced solutions in real-world environments without losing full control of their product.
Key Considerations for SMEs
When deciding between grants and tenders, SMEs should ask:
- Do we need non-dilutive capital to innovate (grant)?
- Or do we want predictable cash and immediate references (tender)?
- How much control over IP is essential for our business model?
- Can we afford a long evaluation cycle, or do we need fast wins?
For many SMEs, the right strategy is to combine both: secure a grant to build and validate innovation, then pursue tenders to scale revenue and adoption.
Final Word
Both EU grants and tenders are powerful tools—but they serve different stages of the FinTech journey. Grants are about building the future, while tenders are about delivering today. The strongest FinTechs often master both, using grants for innovation and tenders for growth.
🚀Let’s Unlock EU Funding Together
At SMEConsulting.ae, we help FinTech SMEs navigate the complexity of EU grants and tenders—whether that means writing winning Horizon proposals or preparing compliant, competitive tender bids.
👉 Book your free strategy call today and discover which path—grant, tender, or both—fits your growth plan.