- New agreements with tech equity funds in Austria, Finland, Germany, Luxembourg and the Netherlands are expected to bring EUR 700m to tech companies across Europe
The EIF has signed the first 6 equity agreements with venture capital funds to support businesses across Europe under the EU’s InnovFin Artificial Intelligence/Blockchain pilot.
Digital startups and SMEs in early- and growth stages can now apply for financing from the six funds:, 42CAP III GmbH & Co. KG, Dawn Capital IV SCSp, Fly Ventures Fund II GmbH & Co. KG, HenQ 4 Fund Cooperatief U.A., Open Ocean Fund 2020 Ky and Speedinvest III EuVECA GmbH & Co. KG.
The cumulative total fund size of EUR 700m supports investments in the tech sector, including scalable Artificial Intelligence/Blockchain Technologies (AI/BT) activities. The funds will deploy this new finance to target sectors in early and growth stage companies, including B2B software, data/analytics, IoT, Smart Cities, automation, language and machine learning, Saas, Fintech, cybersecurity and the future of work.
To-date, there has been a very strong demand from the market and more than 60% of the EUR 100m risk-sharing allocation set out in the initial InnovFin AI/BT pilot has already been committed. A promising additional pipeline is expected to materialise by the end of the year/early 2021.
The EU’s InnovFin AI/BT pilot invests into venture capital funds whose strategies target AI/BT activities, as well as co-investments alongside equity funds into companies operating in these sectors. The new EFSI backed funds were announced following the launch of the European Commission’s Digital Finance Package, allowing the EIF and the EC to continue further scaling-up a strategic cooperation in the next Multi-annual Financial Framework (MFF) under InvestEU and in line with complementary activities under the Digital Europe Programme.
EIF’s participation in the funds was made possible by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe of the European Commission.
Thierry Breton, Commissioner for the Internal Market, said: “Europe needs more investments in highly innovative digital companies. I welcome the collaboration with the EIF which resulted in the first EU-wide investment fund to support the incubation and scale-up of highly innovative AI and Blockchain technologies.”
EIF Chief Executive, Alain Godard said: “It is a priority for Europe to be at the forefront of the development of Artificial Intelligence/Blockchain Technology, in order to remain competitive and improve people’s lives, bringing major benefits to our society and economy. Europe is home to a world-leading AI and Blockchain research community with vibrant start-ups and a wide range of traditional industries. I am delighted that we can partner with the EC to invest in these 6 funds which target companies looking to adopt innovative processes and business models”.
The resource allocation to potential funds and / or co-investments into companies will be considered on first-come-first-assessed basis of the expressions of interest depending on the merits of the proposal. Additional information on the AI/BT pilot can be found in the Addendum to Annex II of the EFSI Equity Instrument Call for Expression of Interest section on the EIF’s website.
Background information
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses by helping them to access finance. EIF designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first-loss guarantees enabling the EIB to invest in more and often riskier projects. The projects and agreements approved for financing under the EFSI are expected to mobilise EUR 535.4 billion in investment, supporting over 1.4 million start-ups and small and medium-sized enterprises across the European Union.
InnovFin Equity is part of InnovFin – EU Finance for Innovators, a generation of EU financial instruments and advisory services developed under Horizon 2020 to help innovative firms access finance more easily. “InnovFin – EU Finance for Innovators” will help to inject around EUR 50 billion in investments in Research and Innovation across Europe.
InnovFin Equity provides equity investments and co-investments to or alongside funds focusing on early stage financing of enterprises operating in innovative sectors covered by Horizon 2020, located or active in the EU or Horizon 2020 Associated Countries.
