The main problem with these Funds, especially European ones, are the inability of the people running the funds to properly identify technologies and direct funding to the right projects. If you have ever taken a look at NLNet's projects you will find how there's a 20:1 ratio of projects that are like "Errrr... okay" versus "Yes, that's a useful thing to fund". It also doesn't help the case that a noticeable amount of the funded projects appear relatively low in activity already.

For example, NLNet is funding bringing an extremely niche and largely irrelevant Android ROM to an even more niche phone and helping it release an update (?!?), while on the other hand you cannot find any support for a smartphone-related project that makes actual sense. I'd argue that there are plenty more successful "de-googled" Android ROMs that have a better track record and a larger user base than Replicant. And I'd also argue that there are a lot more reasonable Pinephone projects (cough cough Camera cough) to sponsor than bringing Android to it to make it.... another Android phone?

Horizon Europe

Horizon on the other hand has a different focus. It is not an open-source fund, but a broad "technology research" fund that ventures into health, environmental and many more areas. Horizon is very much politically driven. One famous example is the Horizon 2021-2022 programme agenda, which they unfortunately deleted, that describes HORIZON-CL3-2021-FCT-01-02: Lawful interception using new and emerging technologies (5G & beyond, quantum computing and encryption). Horizon is the very initiative that ProtonMail received funding from, btw.

Long story short, I don't think more funds and programs are needed, but rather a different way of how the existing ones are being run. From what I see, in many cases funds either completely miss the target, or they suffer from NIH syndrome when there are existing alternatives.