Cascade Funding
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Cascade Funding

Cascade funding, or also known as Third Party Financial Support, is a European Commission mechanism that distributes smaller amounts of public funds in a more agile way, supporting specific topics such as the incorporation of new technologies, the promotion of start-ups and sector pioneers, etc.

The main objective of this funding method is to simplify administrative procedures for applicant entities, mostly SMEs and start-ups, thus allowing some EU-funded projects to issue, in turn, open calls for further funding. In other words, cascade funding is a simplified public funding opportunity, designed to facilitate a greater capillarity of EC funds and actions, facilitating the participation of SMEs and start-ups, since for them, participating in a European project means dealing with a large amount of bureaucracy.

How does cascade funding help SMEs and Start Ups?

This mechanism offers funds, ranging from 50,000 to 150,000 euros, to start-ups and micro-SMEs; it offers them the possibility of establishing relationships and working side by side with other companies – many of them from industries of great weight and importance at a European level, technology centres and universities. To participate, no prior guarantee or collateral is required; the evaluation times are shorter, as is the bureaucratic and administrative management itself, and the reporting is simpler, since it is based, in most cases, on work performance.

Cascade funding is grants that are managed and paid by the beneficiaries of the European project that supports them. This means that funding decisions are no longer the responsibility of the European Commission, but of the project leaders or coordinators. They open the calls for proposals to attract potential beneficiaries, more specifically, start-ups and SMEs.

Regarding the sectors that can benefit from this type of funding, the vast majority of cascade grants cover digital areas, such as Industry 4.0, data, embedded systems, but they are also being extended to blockchain or energy saving technologies. However, funding can be allocated to various types of specific activities, from studies, to experiments, pilots, developments, etc.

800 M€

Under Horizon 2020 in Cascade Funding


Projects in which we are involved


Organisations supported by Zabala Innovation


Dissemination through support programmes

Frequently asked questions

  • What is cascade funding?

    The funding is a mechanism of the European Commission that provides an opportunity for start-ups, and small and medium-sized enterprises to quickly access European funds ranging from 50,000 to 200,000 euros. In addition, fewer applicants for these grants increase their success rate, making them an attractive source of funding. It also represents a valuable opportunity for these entities to strengthen their collaboration networks at the European level and to consolidate both their position and that of their products in the European market.

  • Who is the target group for this type of aid?

    Although most of them are aimed at entrepreneurs and SMEs, it is important to check in detail the conditions in each case as some are open to universities, centres, large companies or individuals not necessarily linked to a legal entit

  • Will cascade funding replace the SME Instrument?

    No. Cascade funding opportunities are a completely separate and unrelated funding mechanism to SME Instrument calls.

  • Why cascade funding?

    Being an innovative start-up, SME or mid-cap company often means facing a number of budgetary challenges that will have to be addressed. Seeking funding under European calls for proposals is the next step, but the process of finding partners and submitting a proposal, in the hope that it will be approved, is a long road that many companies cannot travel.

    This is where cascade funding comes in. Horizon 2020 allocated almost €800 million in cascade funding calls. In practice this means that instead of going directly to the source, which in this case is Horizon 2020, start-ups and SME owners can seek funding as a third party through an open call for an ongoing project.

Sara Mateo

“All companies looking for funding and willing to take the next step to launch or consolidate their products and services on the market, can find an opportunity here.”

Sara Mateo

Entrepreunership Knowledge Area Leader

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