The European Investment Fund (EIF), KredEx and the Estonian Ministry of Economic Affairs and Communications signed on Thursday agreement to establish EstFund, a 60 million euro risk capital fund-of-funds investing in several risk capital funds which in turn will then invest primarily in Estonian enterprises.
This initiative will target smaller and earlier stage investments, operating in a complementary way to the already existing successful Baltic Innovation Fund initiative that targets larger and later stage deals.
The fund will finance small and medium sized firms via three selected risk capital funds, allocating half of the capital for Venture Capital Fund and splitting the other half between Expansion Capital Fund and Business Angels Co-Investment Fund.
EstFund is the first Structural Fund-supported fund-of-funds that EIF will invest into and it is made possible by the European Fund for Strategic Investments (EFSI), the heart of the Commission’s Investment Plan for Europe.
“The new EstFund is a first of its kind in Europe and shows how together with local risk capital funds and the Estonian authorities, EIF can help to build a strong investment ecosystem in Estonia,” Roger Havenith, The European Investment Fund’s Deputy Chief Executive, said in a statement.