LISBON (Reuters) - The European Union launched a venture capital fund of 400 million euros ($442 million) on Tuesday aimed at helping regional startups grow and address a capital shortage in Europe for such firms compared with the United States.

The EU will provide 25 percent of the capital and is inviting private investors to put up to three times more funding, which would bring the overall size of the fund to up to 1.6 billion euros, according to Carlos Moedas, European Commissioner for research, science and innovation.

Moedas made the announcement at the Web Summit being held in Lisbon, one of Europe's biggest venues for tech startups.

"In Europe we have a problem - companies are created and are then bought by venture capital funds from other parts of the world," Moedas told reporters. "So the idea is to create a fund to allow them to be created in Europe and then stay in Europe."

Moedas said there is no shortage of new companies created in Europe, but the problem is to scale them up, or finance growth after the initial phase.

The European Commission is inviting fund managers to apply to lead the new venture capital fund with a deadline for applications of Jan. 31, 2017.

(Reporting by Axel Bugge; editing by Mark Heinrich)