SmartCap set to publish Green Fund direct investment terms by the end of October
SmartCap Green Fund, SmartCap’s initiative to accelerate the launch of innovative products, services and technologies supporting the green transition, aims to publish the detailed terms of direct investments from the fund by the end of October.
“Established in late 2021, SmartCap Green Fund’s objective has been to provide funding to innovative early-stage Estonian green technology companies – both through dedicated venture capital funds as well as direct investments to companies,” explained fund manager and Member of the Board of SmartCap, Sille Pettai.
In September, SmartCap launched a call to find two private venture capital funds with a strategy to invest in green technology companies. In parallel, SmartCap has been working to launch the terms for SmartCap Green Fund’s direct equity investments for companies as there is clear demand for capital that is not sufficiently available on the local capital market.
“Our aim is to invest up to 20 million euros from SmartCap Green Fund as direct investments until the end of 2024 in the first phase,” explained Sille Pettai. “We plan to publish detailed investment terms, including all relevant application information for companies, by the end of October.”
In early 2022, SmartCap in cooperation with EY conducted a market study among green technology entrepreneurs and investors, to assess the availability of capital for Estonian green technology companies.
According to the study, the business model of non-software focused green technology companies is generally less attractive and too time-consuming for investors. Therefore, the state has an important role to play in improving and diversifying the capital available to companies and thus in attracting private investors.
SmartCap Green Fund is 100 million euros in total and it is planned to offer equity investments either directly to companies or venture capital funds until 2026 together with private investors.
SmartCap Green Fund is financed by the European Union NextGenerationEU Recovery and Resilience Facility funds.