Baltics to get a boost from new EUR 250m innovation fund27.09.2012, 14:51
Estonia, Latvia and Lithuania are pulling together with the support of the European Investment Fund to kickstart investment in their countries – and much of the cash is likely to go to the tech startup sector.
In a somewhat unusual move, three neighbouring countries in the Baltics have pulled together to create a single innovation fund worth at least EUR 200m.
The Baltic Innovation Fund, announced on Wednesday, takes in 40m from the European Investment Fund (EIF) and 20m each from the national investment guarantee agencies of Latvia, Lithuania and Estonia.
In 2013, BIF plans to double the funding to between EUR 200m and 250m by attracting additional placements from private investors and pension funds.
There are no set targets regarding how much of this cash will go to the technology sector, but, given the existence of budding tech startup scenes in all three countries, it would be vastly surprising if they didn’t get a significant share.
“This particular region of the European economy has shown good dynamism in that area, and we hope this will be a further stimulus for that kind of activity,” EIF northern Europe chief Graham Cope told me. “We’re leaving the scope of investment opportunities very wide to allow the fund managers full freedom [but] equity of this nature tends towards certain sectors. Technology is one of them; so are life sciences. We’re looking at growth-focused sectors.”
It is, as I mentioned above, unusual for European countries to band together in this way. Indeed, Cope noted that the EIF has already got similar arrangements in place with individual countries such as the UK, but had not until now dealt with multiple states at once.
“The individual Baltic markets are quite small on their own, and all individual entrepreneurs there are thinking pan-Baltic if not pan-European,” Cope said. “We guided the member states to work together to create Baltic market activity [through critical mass]. It’s more in line with the way private investors see the market, as well.”
The action will apparently start next year, when the EIF will start to process transactions with between three and six fund managers. The cash is expected to support a four-year investment period.