The Catalan Institute of Finance (ICF) has created a new venture capital fund, endowed with €40 million, to promote technology and innovative companies in the growth phase of the digital, industrial and climate sectors with an operational presence in Catalonia. This new fund from the Catalan government's public promotional bank, called ICF Venture Tech III, is expected to invest in around 15 companies, with a maximum of €4 million for each operation. The previous vehicle, ICF Venture Tech II had a size of 20M euros.
ICF Venture Tech III will target start-ups that have already passed initial funding rounds – when the company is still just an idea and needs investors to develop (seed phase) – and will target those that are in a strong growth phase (series A or B). This is the main difference with respect to the two venture capital funds that the financial institution launched previously: Capital MAB and ICF Venture Tech II.
"The Venture Tech III fund will open a new stage for ICF venture capital investment," explained ICF CEO Vanessa Servera i Planas, who pointed out that "the financing needs of start-ups in the earliest development processes (seed phase) are already adequately covered by the private sector in Catalonia."
"Now our role must focus on opening a new path to which private investors can join to give a new impetus to the Catalan entrepreneurial ecosystem. As a public bank, we are launching ICF Venture Tech III with the aim of supporting those emerging companies in more developed phases of growth that want to take a greater leap towards internationalization, attracting international investors, increasing their revenues and creating jobs," he said.
"After more than 20 years supporting numerous start-ups together with Catalan asset managers, at the ICF we believe that emerging companies based in Catalonia need public development banks to promote a new period of more ambitious investments so that those more consolidated companies in the process of expansion face new challenges. Only in this way will we generate a greater impact on the growth of the Catalan economy and entrepreneurial ecosystem," he added.
In this regard, the ICF's new venture capital instrument aims to increase the size of the funding rounds carried out in Catalonia. Currently, most investments are up to three million euros, representing 82% of operations in Catalonia, according to data from dealroom.co. For this reason, ICF Venture Tech III will focus on participating in investment rounds of between three and twenty million euros, which currently represent only 10% of the total and where there is a significant presence of international investors.
The promotional public bank will participate in these rounds of financing in the form of co-investment or structured debt, i.e. together with other investors in order not to assume the risk of the investment on its own or in exchange for the company receiving the resources complying with a series of mandatory conditions or guidelines.
With ICF Venture Tech III, we are looking for capital-efficient, scalable companies aimed at large, growing markets and where a clear differentiation is provided through technology and innovation that allows competitive advantages to be obtained. In other words, companies with a high potential for growth and appreciation.
In line with the ICF's public banking model, the ICF Venture Tech III fund will be an Article 8 fund, i.e. it will take into account environmental, social and governance (ESG) criteria in its investment strategies and, therefore, will focus on companies that generate a positive social impact and are committed to protecting ecosystems both in their activity and in their internal operations.
The ICF's activity in venture capital, i.e. the entity's investments in emerging companies, aims to boost the Catalan entrepreneurial ecosystem and support innovative projects so that they can be consolidated. The possible profits obtained from this activity are reinvested in new investments and financing channels in order to continue fulfilling its mission as a public bank.
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