As reported by E24 news, the Estonian government plans to create a fund of funds with a total size of EUR 80 million with an aim to invest into startups. The government is set to choose fund managers for the endeavor, and invest EUR 60 million, while the other part should come from private investors.
The total amount will depend on the amount of private investment that this initiative can gather. The fund of funds will be created using the Kredex financial institution, and according to Andrus Treieri, the director of Kredex, the size of the individual funds will depend on the contribution of private investors.
In comparison to the Finnish Tekes, the government aims to provide the investment to funds as opposed to matching up with private investments into the companies themselves.
When talking about the size of the investment from the government side of things, the article mentions that they want to put as little as possible into the fund but yet enough to attract the investors into the initiative. To develop the Venture Capital market, the government is likely to contribute more in the early stages and gradually wind down their own participation.
It is a little unclear what the terms and conditions of the fund of funds will be, but it is an interesting initiative. This comes just a few months after the announcement of the Baltic Investment Fund, and is also a nice counter-balance to the JEREMIE funds that are available in Latvia and Lithuania.
From the looks of it, every government in the region is starting to take startups seriously and develops some sort of an initiative to support them. Do you think this is a good thing? Let us know in the comments.
Top Image Courtesy of Shutterstock // Estonia Euro