EU officials have drafted a plan that envisages the creation of a sovereign wealth fund that would invest €100 billion in European digital startups.

The fund is specifically aimed at technological scouting, a move that would accelerate the growth of a European equivalent to Google, Apple, Facebook, Amazon and a direct challenger to China’s Baidu, Alibaba, and Tencent. While the EU remains a global leader in digital market regulation, the region severely lags behind in innovation and investmen...