Horizon Europe: What It Actually Funds and Whether You Should Apply

Horizon Europe is the largest research and innovation funding programme in the world, with €95.5 billion for 2021 to 2027. It is also the one most commonly misunderstood by technology companies, who either assume it is only for universities or assume it will fund their product roadmap. Neither is right.

This is a practical view: what the structure means, what actually gets funded, what the money looks like, and how to tell in about ten minutes whether it is worth your time.

The structure, and why it matters

Horizon Europe has three pillars plus a horizontal part, and knowing which one you belong in saves you from reading the other three quarters of the documentation.

Pillar I, Excellent Science. The European Research Council for frontier research led by individual investigators, Marie Skłodowska-Curie Actions for researcher mobility and training, and research infrastructures. Almost entirely academic. If you are a company, this is usually not your pillar, though MSCA can fund hosting a researcher.

Pillar II, Global Challenges and European Industrial Competitiveness. Six thematic clusters. This is where most collaborative research money sits and where most technology companies belong.

Pillar III, Innovative Europe. The European Innovation Council, the European Institute of Innovation and Technology, and European innovation ecosystems. The EIC Accelerator lives here and is covered separately in our EIC Accelerator guide.

Widening participation and strengthening the European Research Area. Instruments aimed at member states with lower research intensity.

For a software or technology company, the practical answer is almost always Pillar II Cluster 4, or Pillar III.

Cluster 4 is the one you want

Cluster 4 is Digital, Industry and Space. It funds the technology sovereignty agenda directly: advanced manufacturing, artificial intelligence, microelectronics, robotics, advanced materials, next generation computing, and space technology.

The 2026 to 2027 work programme is worth around €14 billion in total across all clusters, and Cluster 4 priorities for that period centre on sustainable industrial technologies including decarbonisation and circular economy models, and technological sovereignty through reducing dependencies in critical technologies.

Other clusters fund technology work too, and it is worth knowing where:

Cluster 1, Health. Digital health, medical devices, health data. A large amount of software gets funded here.

Cluster 3, Civil Security for Society. Cybersecurity, disaster resilience, border security. Genuinely relevant for security companies.

Cluster 5, Climate, Energy and Mobility. Smart grids, energy systems, transport digitalisation, connected and automated mobility.

Cluster 6, Food, Bioeconomy, Natural Resources, Agriculture and Environment. Agritech, environmental monitoring, earth observation applications.

New for 2026 to 2027 are horizontal calls that cut across clusters, including a €90 million call on AI in science supporting trustworthy AI in fields such as advanced materials, agriculture and healthcare, and a €540 million call supporting the Clean Industrial Deal.

What the money actually looks like

This is where expectations most often go wrong.

Action types determine funding rates. Research and Innovation Actions fund 100 percent of eligible costs. Innovation Actions fund 70 percent for profit-making entities and 100 percent for non-profits. Coordination and Support Actions fund 100 percent. Which type a call is determines your co-funding obligation, and it is stated in the call text.

Indirect costs are a flat 25 percent on top of eligible direct costs. There is no negotiation and no alternative overhead model.

Personnel costs dominate, and they are claimed on an actual cost basis with timesheets. This is the single largest source of audit findings and it is why the reporting burden is real.

Project sizes vary enormously. A typical Cluster 4 Research and Innovation Action might be €4 million to €8 million across a consortium of eight to fifteen partners over three to four years. Your share as one partner might be €300,000 to €800,000. That is a meaningful amount of engineering time, and it is not transformative capital.

Payment is in instalments with a retention. Pre-financing at the start, interim payments against reporting periods, and a final payment after the final report is accepted. You will be funding work before you are paid for it.

What actually gets funded

Reading a few funded proposals is the fastest calibration available, and many are public. The pattern that emerges:

A real research question, not a product plan. Successful proposals identify something that is not currently known or possible, and propose to find out. "We will build a better version of an existing tool" does not score.

Consortium logic that makes sense. Partners who each bring something necessary, from several member states, usually mixing academic and industrial. A consortium assembled to satisfy the eligibility rule rather than to do the work reads exactly like what it is.

Impact articulated concretely. Not "this will benefit European industry" but a specific pathway from the result to exploitation, with named target sectors and a credible route.

Explicit engagement with the call text. The evaluators score against the expected outcomes in the call. Proposals that describe a great project which happens not to match those outcomes score badly on relevance.

The honest case against applying

Success rates in Horizon Europe are low. Depending on the call, single-figure to low double-digit percentages. A full proposal takes a serious amount of work from several people across several organisations, and most of that work is unpaid.

The programme suits you if:

• You have a genuine research question that you would want answered even without funding
• You already have or can readily build a credible consortium
• You can wait six to twelve months from call to grant agreement, and longer for results
• You have someone who can carry cost reporting and audit obligations for three years
• The collaborative element is useful to you rather than a tax

It does not suit you if:

• You want to fund normal product development
• Your innovation is commercial rather than technical
• You need money this quarter
• You are a small team where the proposal work would come out of delivery capacity

That last point is the one that catches SMEs. A proposal is roughly a person-month of senior time, spread across several people, and the expected value of a person-month against a ten percent success rate is not obviously positive unless the amount is large or you can reuse the work.

Practical routes in that people miss

Join an existing consortium rather than building one. Coordinators actively look for partners with specific capabilities. Partner search platforms exist, National Contact Points broker introductions, and being the specialist SME that a coordinator needs is much easier than assembling fifteen partners yourself.

Look at cascade funding. Many funded projects redistribute money to third parties through open calls, typically €50,000 to €200,000 with a much lighter application. This is by far the easiest way into the ecosystem and it is enormously underused. Search for financial support to third parties.

Consider being a subcontractor. If you provide a service that funded projects need, you can be paid from grant budgets without being a beneficiary at all, with none of the reporting burden. This is often the right answer for software companies.

Check whether your work fits a Mission or Partnership. Horizon Europe has five Missions and a large set of co-programmed European Partnerships with their own calls and often different dynamics.

Deadlines and mechanics

Most calls opening in early 2026 have deadlines in September or October 2026, though some calls in Clusters 1, 4, 5 and 6 have deadlines in March or April 2026. Two-stage calls have an earlier short first-stage submission, which is a much lighter lift and a good way to test an idea.

Everything happens on the Funding and Tenders portal. You need a Participant Identification Code, which takes a few days, so do not start that on deadline week.

What comes after 2027

Horizon Europe as currently constituted runs to the end of 2027. The successor framework programme has been proposed for 2028 to 2034 under the next Multiannual Financial Framework, keeping the Horizon Europe name, with a proposed budget of around €175 billion.

It would sit alongside a new European Competitiveness Fund, with the stated intention that the two cover the full journey from research through to scale-up. The detail is covered in our European Competitiveness Fund and MFF guide.

If you are planning multi-year research strategy, the shape of the successor matters more than the tail of the current programme.

Where this fits

Horizon Europe is one of several instruments and often not the right one. The full landscape is mapped in our EU technology funding guide. If you are deploying rather than researching, the Digital Europe Programme is a better fit. If you are a startup scaling a deep tech product, look at the EIC Accelerator instead.

Getting help

We build software for companies across Europe, including partners in funded research consortia. Where we are useful is on the delivery side: building the technical work packages, producing the artefacts that reporting requires as a by-product of normal engineering, and making sure what gets built survives the end of the project rather than becoming an unmaintained demo.

We are not grant consultants and we do not write proposals. If you have funded work that needs building, or a project that needs to turn into a product after the grant ends, write to office@c9group.dev. More about our work on the EU market entry page.