European Investment Fund invests €20 million in Irish SMEs

The European Investment Fund (EIF), with the support of InnovFin Equity and COSME, is investing €20 million in ACT Venture Capital’s latest fund, ACT V, in Ireland. The agreement will allow ACT to finance around 30 high potential early and expansion stage companies in the information and communication technology sector in the coming decade. By mobilising other investors, including funds from the private sector and EIF, this equity investment by EIF should lead to overall investments of more than €90 million for primarily Irish SMEs looking to expand internationally.

This agreement was made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the European Commission's Investment Plan for Europe, the so-called "Juncker Plan". The Investment Plan is already expected to mobilise over €3.4 billion in investments in Ireland and €225 billion across Europe.

The investments made by the new fund – set up by ACT – will focus on expansion financing in high-growth, export-oriented companies in sectors such as software, internet, digital media, communications and mobile. The fund includes investment from the Ireland Strategic Investment Fund (ISIF), Enterprise Ireland (EI), Allied Irish Banks (AIB) and private investors, and aims to back 15-18 expansion companies over the next four years and will invest up to €7 million in each company. Some of these companies will come from ACT’s "seed fund" activities which backs early-stage companies at a rate of 8-10 deals per year and having already completed over 50 such deals.

The agreement was announced on the day of IBEC’s corporate breakfast seminar. Speaking at the event, EIB Vice President, Andrew McDowell said: “The EIB Group is a firm believer in the potential of innovative companies in Ireland, this is why we are delighted that the EIF is partnering with the ACT Venture Capital Fund. The transaction will help to strengthen the Irish VC ecosystem and endorse an experienced second-generation team now raising its first full scale fund. EIF's commitment is also critical to ensure that the fund closes at its target size and I am convinced that ACT Venture Capital will ensure that companies can access this finance soon. The health of the European economy rests on its ability to innovate and EU support remains a key component. This cooperation clearly contributes towards those efforts.”

European Commissioner for Agriculture and Rural Development Phil Hogan said: "Ireland is a global leader in the online, tech and digital space with vast potential to do even more. Assisting companies in highly competitive markets in the start-up and scale-up stages of their development can make a crucial difference. I am glad that the European Commission's "Juncker Plan" is playing an important role in helping innovative, small companies access the finance they need to develop new products, expand operations and create jobs. I wish those businesses that are set to benefit from this financing every success as they take their next steps."

John Flynn, Managing Director of ACT Venture Capital, said “This fund will help to sustain Ireland as one of Europe’s most active locations for technology venture funding”. Mr Flynn added that “ACT is keen to partner with leading entrepreneurs where we can exploit our international network to help them expand. We are also delighted to announce the expansion of our investment team with addition of Conor Mills and Tomas Miranda who bring key sector knowledge from their experiences in Paddy Power, Google and McKinsey. Collectively, we are eager to partner with the next generation of Ireland’s most ambitious entrepreneurs and help them become international success stories".  

About the European Investment Fund

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.

About the Investment Plan for Europe

The Investment Plan for Europe, the so-called "Juncker Plan", is one of the European Commission's top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.

The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The EFSI is already showing concrete results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise more than €225 billion in investments and support around 445,000 SMEs across all 28 Member States.

In September 2016, President Juncker proposed to extend the EFSI by increasing its firepower and duration as well as reinforcing its strengths. The proposal is in its final stages of negotiation between the European Parliament and the Member States.

About InnovFin – EU Finance for Innovators

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 €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.

Businesses can contact selected financial institutions in their country to access InnovFin and other brands of EU Finance: http://www.access2finance.eu/.

About the COSME Equity Facility for Growth (EFG)

The Equity Facility for Growth (EFG) is dedicated to investments in risk-capital funds that provide venture capital and mezzanine finance to expansion and growth-stage SMEs, in particular those operating across borders. It is expected that some 500 firms will receive equity financing through the programme, with overall investment reaching up to €4 billion. The EFG is part of COSME, the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020. It has a total budget of €2.3 billion and at least 60% of the programme will be devoted to improving access to finance for SMEs in Europe. Businesses can contact selected financial institutions in their country to access EU financing: www.access2finance.eu.

About the Ireland Strategic Investment Fund

The Ireland Strategic Investment Fund (€8.5 billion at end July 2017) has a statutory mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland. The Fund has made investment commitments of €2.9 billion to end July 2017 and plans to deploy the remainder of its resources over the coming years as suitable investment opportunities are identified.

About Enterprise Ireland

Enterprise Ireland is the Irish government agency responsible for the development and growth of Irish companies internationally in order to grow exports and jobs. Enterprise Ireland works with entrepreneurs and businesses to help them to start-up, develop innovative products and services, and scale internationally. Enterprise Ireland facilitates access to international markets through its international office network, supports business strategy & management capability training and provides finance, investment and research expertise. For more information, go to www.enterprise-ireland.com.

About AIB

Allied Irish Banks is a significant seed, venture and growth capital fund investor in the Irish marketplace with commitments currently totalling €146 million to twelve funds.  These funds have a combined fund size of c. €900m, a large part of which is providing equity finance to Irish SMEs with high growth potential particularly across the Technology, Fintech and Life Sciences sectors.

Press contacts:

EIF:
David Yormesor
Tel.: +352 42 66 88 346
e-mail: d.yormesor@eif.org  

ACT Venture Capital Limited:
John Flynn | Managing Director
Tel.: +353-1-2600966
e-mail: jflynn@actvc.ie  

European Commission:
Siobhán Millbright
Tel. +32 229 57361
e-mail: siobhan.millbright@ec.europa.eu