SmartCap announced on September 6th a Call for Expressions of Interest (Call) to find up to two private fund managers, who would establish green technology investment funds to which SmartCap Green Fund will make a cornerstone investment of 20 million euros each.
“Our aim is, with dedicated funds from European Recovery and Resilience Facility to increase the supply of venture capital in order to accelerate the launch of innovative products, services and technologies supporting the green transition,” said SmartCap board member and fund manager Sille Pettai. “For this purpose, we are looking for fund management teams, who have experience in the field of green technology and the ability to invest in start-ups contributing to the achievement of environmental and climate goals.”
The principal investment objective of the two new funds, to which SmartCap Green Fund will make a cornerstone investment in the amount of 20 million euros each, is to support early-stage greentech companies with high growth potential in strategic areas that are established and operating in Estonia.
The total value of the two funds will be significantly higher than 40 million euros, with the fund managers expected to raise money from private investors in addition to SmartCap’s anchor investment.
Fund managers interested in participating in the Call must submit their expressions of interest no later than 30 November 2022. The evaluation process is expected to take until early 2023, while anticipated selection of preferred applicants would fall into summer of 2023. All detailed info on the Call can be found here.
A study of entrepreneurs and investors active in green technologies, which SmartCap commissioned in spring, confirmed that knowledge-intensive green technologies and products and services aimed at alleviating environmental and climate problems come with a long development cycle, are often non-software solutions & bear significant technical risks, which is why private investors need more motivation to get involved. The results of the survey, conducted by EY, also showed that without contribution from the state, investors are less inclined to invest in the development of products and services with knowledge-intensive hardware or physical components.
SmartCap plans to offer equity investments through € 100 million SmartCap Green Fund until 2026, to which private investors contributions will be added.
SmartCap Green Fund is financed by the European Union NextGenerationEU Recovery and Resilience Facility funds.
SmartCap is a subsidiary of the joint agency of KredEx and Enterprise Estonia and a small fund management company registered with the Financial Supervision Authority which manages the national Venture Capital Fund and the Green Fund.
