Since the start of 2015, the European Investment Fund (EIF) and equity funds across Europe have signed investment agreements worth over €1 billion which will provide equity financing for businesses. These 28 transactions benefit from the support of the European Fund for Strategic Investments (EFSI) the heart of the Investment Plan for Europe.
The new agreements enable fund managers to invest in promising start-ups, SMEs and midcaps, benefitting from early-stage to growth capital investments. By mobilising other investors, including funds from the private sector, this is expected to result in overall investments of more than €12 billion across the EU.
Some examples of where these funds have invested so far include a leading player in the Italian ophthalmic industry, a start-up located in Berlin offering on-demand home services through a global online platform, and a start-up with its headquarters in London and an office in Athens providing a hiring software platform, primarily for SMEs, which facilitates and simplifies the recruiting process for employers. Many more are expected to receive similar financing support under EFSI in the coming months.
The resources under the EFSI SME window are being deployed following a significant increase in the EIB Risk Capital Resources (RCR) mandate for equity investments, managed by the EIF.
Speaking at the Brussels event "EFSI boosts innovation", European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "The investment plan for Europe aims at providing the financial instruments that the market is not providing today so that Europe can invest in its future. This is particularly true for SMEs that are lacking equity financing in Europe, so I welcome the news that the EIF has reached €1 billion in equity financing through EFSI."
European Commissioner Carlos Moedas, responsible for Research, Science and Innovation, said: "Too many start-ups leave our continent because they can’t raise the finance to commercialise innovative ideas. That is why it is so encouraging to see the European Fund for Strategic Investments off to such a good start, investing in promising innovative projects and SMEs from biotech to renewable energy. Alongside Horizon 2020, this will give new energy to Europe's innovation ecosystems."
Commenting on results achieved in the equity space, EIB Vice-President Ambroise Fayolle, said: “These are the first EFSI equity transactions signed in Europe. The deals reflect the EIB Group’s commitment to respond swiftly to calls from Member States, the European Commission and the European Parliament for a rapid launch of concrete initiatives under EFSI, accelerating lending capable of boosting jobs and growth in the EU.”
EIF Chief Executive, Pier Luigi Gilibert commented: “The additional EUR 1 billion investment signed under EFSI gives leading venture capital and mid-market funds an opportunity to target more companies in the coming months, helping to meet demands for their current deal flow and boosting the growth economy. Many of these funds have already started investing in companies, including start-ups, in France, Germany, Italy, the UK and Sweden and we expect to see more investments in other countries soon.”
A full list of equity funds under EFSI can be found here.