The Deputy Prime Minister, Minister of Economy, Étienne Schneider, introduced a seed fund that the government created jointly with a group of private investors to support the financing and development of startups in the field of information and communications technology (ICT), which is considered a key component on the path to national economic diversification. (Étienne Schneider presents the “Digital Tech Fund” for financing technology startups in the ICT sector. Photograph: MECO)
By meeting the funding needs of startups in the development stage, the Digital Tech Fund completes the favorable national ecosytem for the development of young innovative companies in the field of ICT.
The Digital Tech Fund was launched on the initiative of the Ministry of Economy as part of Digital Lëtzebuerg. The fund will take equity stakes in promising innovative enterprises that are less than seven years old and which have ideally already developed functional prototypes of their products. The fund will focus primarily, but not exclusively, on making venture capital investments in the areas of cybersecurity, FinTech, Big Data, Digital Health, and media, as well as Next Generation Communication Networks, digital learning, the Internet of Things and satellite telecommunications and services.
Designed according to the principles of an “evergreen” fund, the Digital Tech Fund will also aim to facilitate the transfer of new technologies from public research, especially from the Interdisciplinary Centre for Security, Reliability and Trust (SnT) at the University of Luxembourg, with which a partnership to support the creation of a spin-off is being finalized.
This new investment vehicle further contributes to making Luxembourg a haven for startups and attracting new and innovative activities.
Operational from May 2016, the Digital Tech Fund will be managed by Expon Capital SARL’s team, which has proven experience in fund management. The Digital Tech Fund will be established as a partnership limited by shares (SCA). The Luxembourg government is contributing 5 million euros to the fund. The financial contribution of the other investors amounts to a total of 15.33 million euros, of which 3 million euros are coming from the Société nationale de crédit et d’investissement (SNCI) and one million euros from the University of Luxembourg.
Developed as part of a public-private partnership, the fund’s other stakeholders (in alphabetical order) include: Arendt & Medernach, Banque internationale à Luxembourg SA (BIL), Expon Capital, High Capital (BHS Services), POST Capital, Proximus and SES. The Deputy Prime Minister, Minister of Economy, Étienne Schneider, said: “By meeting the funding needs of startups in the development stage, the Digital Tech Fund completes the favorable national ecosytem for the development of young innovative companies in the field of ICT. Complementing the existing financing instruments and public support measures, such as the Fit4Start program, the Ministry of Economy’s various aid schemes and the Luxembourg Future Fund, this new investment vehicle further contributes to making Luxembourg a haven for startups and attracting new and innovative activities.”
Private companies established in Luxembourg will be both beneficiaries and contributors in helping to attract talent and innovative ideas.
Karim Michel Sabbagh, President and CEO of SES said: “Continuously developing, Luxembourg as an open and interconnected economy in the heart of Europe needs to attract more intellectual capital. Such highly mobile and international talent seek the best centers of intellectual inspiration and funding—places where audacity is stimulated. Luxembourg has a lot to offer such talent, thanks in particular to the University of Luxembourg, government support, the proximity of financial and industrial experts, and now the Digital Tech Fund. Private companies established in Luxembourg will be both beneficiaries and contributors in helping to attract talent and innovative ideas.”
Alain Rodermann, founding member of Expon Capital SARL said: “Our team has over 30 years of experience in venture capital at reputable companies and nearly 50 investments in Europe and the United States. As active managers, our expertise is at the disposal of the entrepreneurs, particularly regarding the establishment of the conditions necessary for successful international expansion.”