Our member SmartCap has announced that SmartCap Green Fund is looking to invest 40 million euros in two private capital funds to accelerate the launch of innovative products and technologies supporting green transition.
SmartCap Green Fund will invest 40 million euros in two private capital funds, which will be found through a Call for Expressions of Interest. Successful fund management teams must have experience in the field of green technology and the ability to invest in start-ups contributing to the achievement of environmental and climate goals, while the fund manager will benefit from having previous expertise in investing in Estonian start-ups.
SmartCap board member and fund manager Sille Pettai
says they are looking for fund management teams experienced in investing in innovative green technology start-ups. “They must aim at contributing to solving environmental and climate problems right here in Estonia, and they also need to be capable of raising private capital,”
The total value of the two funds will be significantly higher than 40 million euros, with the fund managers expected to raise money from private investors in addition to SmartCap’s anchor investment.
A study of entrepreneurs and investors active in green technologies, which SmartCap commissioned in spring, confirmed that knowledge-intensive green technologies and products and services aimed at alleviating environmental and climate problems come with a long development cycle and significant technical risks, which is why private investors need more motivation to get involved. The results of the survey, conducted by EY, also showed that without contribution from the state, investors are less inclined to invest in the development of products and services with knowledge-intensive hardware or physical components.
Pettai says that developing new innovative green technology ideas and solutions demands patience, funding and experience in the field. “For this reason, the state has the responsibility to take on the leading role as the cornerstone investor and find private fund management teams with green investment experience,”
Market consultation for finding suitable funds commenced on the 1st of August 2022. The Call of Expressions of Interest to find suitable management teams will be launched in September.
In the course of the market consultation, interested fund management teams will have the chance to review the draft Main Terms of the Fund and requirements of the Business Plan and submit questions and proposals. Feedback is expected until the 26th of August, prior to which a market consultation presentation will be held for interested parties.
SmartCap plans to offer equity investments amounting to 100 million euros through SmartCap Green Fund until 2026, to which private investors' contributions will be added.
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.