To ensure the continuity of the Digital Tech Fund in the coming years, the Luxembourgish government, together with a group of investors, is participating in the creation of a new compartment of the fund.
The Minister of Economy, Franz Fayot, announced at a press conference that the Luxembourgish government is financially participating, alongside a group of investors, in the creation of a new compartment of the Digital Tech Fund to continue addressing the funding needs of innovative startups in their early stages and thereby strengthen the startup ecosystem development in Luxembourg.
During the press conference, Minister of Economy Franz Fayot said, The ‘Digital Tech Fund is part of the existing public financing instruments and support measures, such as the Fit 4 Start program or various aid schemes of the Ministry of Economy, which contribute to making Luxembourg a welcoming place for startups and attracting new innovative activities. Furthermore, the fund plays an important role in identifying and assisting the most promising startups in their international growth.
Launched in 2016 on the initiative of the Ministry of Economy and in collaboration with private investors, the Digital Tech Fund invests in innovative companies that are less than 7 years old and develop products or services preferably in the form of functional prototypes.
With a total financial allocation of 20.33 million euros, divided into two installments of 10.16 million euros for the periods 2016-2019 and 2020-2022, the pre-seed and seed fund is managed by Expon Capital. With investments in 13 technology startups, the Digital Tech Fund has nearly completed the deployment of its initial investment capital in this portfolio.
“A great source of satisfaction for the Digital Tech Fund is that the 13 companies we have invested in are still alive and kicking, and enabled the startups to attract 120 million euros in capital funding, including from foreign funds,” shares Alain Rodermann, co-founder and Managing Partner of Expon Capital.
With 14 million euros raised in its first closing, this new compartment has been funded by the current shareholders of the Digital Tech Fund (BIL, POST Capital, Proximus, SES, and SNCI), as well as new investors such as the Chamber of Commerce, Cargolux, and several private individuals.
The government’s participation in the launch of the new compartment amounts to 3 million euros through the Ministry of Economy’s budget, in addition to 1.5 million euros from the Société Nationale de Crédit et d’Investissement (SNCI).
“We do not want to (anymore) be the incubator for the United States, but we want to foster the emergence of our own champions,” expressed Luxembourg’s economy minister. “It is time to consider our own scale-ups. This is also the essence of our roadmap – beyond developing a startup ecosystem, we aim to create a scale-up ecosystem.”
Philippe Linster, CEO of the House of Startups, a satellite entity of the Chamber of Commerce, further stated, “The startup and innovation ecosystem is a priority for the Chamber of Commerce, which we already support through numerous initiatives, including the House of Startups. Our participation in the Digital Tech Fund is therefore fully complementary to the existing offering. This fund perfectly illustrates the good collaboration that exists between the public sector, institutional bodies, and the private sector.”
On a side note, fundraising for a fourth compartment will begin after the summer, with a target of a further 20 million euros for the Digital Tech Fund.