BRUSSELS — The EU and the U.K. will start talks on British access to a new €5 billion fund that wants to provide late-stage funding to tech companies.

Both sides have agreed to “commence negotiations,” European Commission President Ursula von der Leyen and U.K. Prime Minister Keir Starmer said Monday following a meeting at the European Political Community summit in Armenia.

Years after Brexit, the talks are another sign of warming relations between the EU and the U.K., as both sides see benefit in collaboration to handle external events such as U.S. President Donald Trump’s tariff war and the conflict in Iran.

The EU created the European Innovation Council Fund in 2020 to take equity stakes in startups, with the Scaleup Europe Fund to follow before the summer, aiming to plug a funding gap that many European companies face.

That €5 billion fund is expected to make much larger investments than the earlier one, from which investments were capped at €30 million.

The Commission is still in the process of setting up the new program, with the selection of a fund manager still pending.

Up until now, the U.K. has had no access to the funds, which are part of the EU’s flagship research and development program, Horizon Europe, despite Britain’s association with it since 2024.

“[The U.K.] has opted out of the part of Horizon Europe which supports equity investments in startup and scale-up companies,” European Commission spokesperson Maciej Berestecki told POLITICO in mid-April.

He added that the Commission was “open to the U.K. becoming fully associated” and was “ready to advance discussion on this matter.”