“The aim of SmartCap Green Fund, with dedicated funds from European Recovery and Resilience Facility is to increase the supply of venture capital to innovative or research-intensive green technology companies,” explained Sille Pettai, board member and fund manager of SmartCap.
SmartCap has already launched the call to find two venture capital fund managers for green technology investment funds and provide them cornerstone investment that enables further private fundraising to establish two new funds.
“However, on average, the time for emerging fund managers to start their first fund may take up to two years,” Sille Pettai said. “While the two green technology investment funds are not yet on the market and actively investing, SmartCap aims to provide capital directly to those green technology companies that are already in advanced stages of fundraising and need leverage to match private investors to close a successful funding round.”
Through the Greentech Investment Programme, we are planning to make 20 million euros worth of investments as direct equity or convertible instruments in greentech companies until the end of 2024.
Under the terms of the investment programme, the target size of one investment into a greentech company is expected to be in the range of 250 000 euros to 2.5 million euros.
“SmartCap Green Fund will participate in the investment rounds together with other private investors, and the participation of private capital must be at least 50% of the investment round. Having said that, we expect the private investors to lead the investment round and be experienced enough to successfully do so,” said SmartCap’s investment manager Mihkel Hollo. “As set forth in the investment programme, SmartCap Green Fund may participate in investment rounds from seed funding up to series B funding.”
The principal objective of SmartCap Green Fund’s investments is to support innovative and research-intensive early-stage greentech companies with high growth potential in strategic areas – energy, agriculture, food industry, transport and logistics, material and chemical industry, and the environment. SmartCap is mostly targeting companies with high non-software component and contribution to green transition. The companies must be established and operate in Estonia, however, the business model must have an international growth potential.
According to Mihkel Hollo, the investment process of Greentech Investment Programme consists of three consecutive phases:
“Based on the anticipated financing needs from Estonian greentech companies, we hope to make first investment decisions by the end of 2022.”
The companies wishing to apply for SmartCap Greentech Investment Programme are invited to review the detailed application terms here.
SmartCap launched a € 100 million SmartCap Green Fund where it plans to make equity investments in greentech companies both directly and through venture capital funds until 2026.
SmartCap Green Fund is financed by the European Union NextGenerationEU Recovery and Resilience Facility funds.
SmartCap is a subsidiary of the joint agency of KredEx and Enterprise Estonia and a small fund management company registered with the Financial Supervision Authority which manages the national Venture Capital Fund and the Green Fund.