EIF Pledges €20 Million to Fuel Expansion of CEE-Based Innovative SMEs via Orbit Growth Debt II Fund

• EIF provides up to €20 million to bolster growth-stage companies in Czech Republic, Poland, Slovakia and the rest of the CEE.
• Pledge to “Orbit Growth Debt II” fund to support fast-growing technology and tech-enabled companies and boost global competitiveness of CEE economies

Prague: The European Investment Fund (EIF) is committing up to €20 million to bolster financing for cutting-edge companies in the CEE region with prime focus on Czech Republic, Poland and Slovakia. The EIF pledge is to a new private credit fund called Orbit Growth Debt II that is managed by Prague & Warsaw-based Orbit Capital and that will direct the funding to small and medium-sized enterprises (SMEs) and Mid-Caps in the region.

Orbit Growth Debt II which successfully held its first closing on May 27^th aims for a total size of €100 million and its goal to provide bespoke non-dilutive financing to European SMEs and small Mid-Caps. Its focus will be on growth-stage software and other technology companies – a segment that across Europe faces a financing gap estimated at €1.4 trillion.

“We are providing crucial support to Orbit Capital in its mission to provide alternative financing to innovative companies in Central and Eastern Europe,” said EIF Chief Executive Marjut Falkstedt. “This investment will not only provide much-needed financing to SMEs and small Mid-Caps but also promote innovation, contributing to the region’s economic growth and competitiveness.”

The Czech Republic, Poland and Slovakia together with Hungary are part of a European Union grouping known as “Moderate and Emerging Innovator Countries”, which will be the core focus of Orbit Growth Debt II. It will provide senior-debt financing to businesses to fuel their growth.

Orbit Growth Debt II is classified as an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation, or SFDR with sustainability aspects being part of the Fund’s investment process.

Orbit Growth Debt II builds on a predecessor fund called Orbit Growth Debt I which a €40 million fund which started operations in 2019 and has invested in 15 Central European companies so far including Czech online supermarket Rohlík, fintech app Twisto, anti-fraud detection company ThreatMark, as well as AI-powered call center software CloudTalk and largest European yacht rental platform Boataround from Slovakia.

“We have introduced Venture Debt - a new type of funding for our region that is attractive to young, fast-growing companies as well as already mature companies that do not yet meet the conditions for traditional bank financing. The Venture Debt II will hold €100 million, allowing technology companies to accelerate further growth,” said Radovan Nesrsta, partner of Orbit Capital. “Venture Debt financing is up to four times cheaper for founders and their investors than if they had to dilute their shares again.”

Background information

About the EIB

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The EIB supports projects that make a significant impact on economic growth, innovation, and job creation. It is also one of the largest providers of climate finance, supporting projects that contribute to environmental sustainability and the fight against climate change.

About the EIF

The EIF is part of the European Investment Bank (EIB) Group and its central mission is to help Europe's micro businesses and SMEs access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, the EIF advances EU goals in the areas of innovation, research and development, entrepreneurship, economic growth and employment.

About InvestEU

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

Press contacts:

EIB

Katarina Karmazinova, k.karmazinova@ext.eib.org, tel.: +352 4379 71570

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