First EIB Venture Debt Summit: EIB becomes the largest venture debt investor in Europe
Highly innovative companies in Europe have received more than EUR 750 million in long-term venture debt financing from the EIB in 2017. The investments are expected to generate more than 6,500 high-quality jobs as well as around EUR 7bn in additional investments in R&D. They also make the EU bank the largest venture debt investor in Europe.
The venture debt product of the EIB supports early-stage, highly innovative companies in sectors such as life science, biotech, software, 3D printing, robotics, clean technologies and artificial intelligence. It combines the advantages of a long-term loan with a remuneration model based on the company’s performance. Venture debt transactions help to strengthen the borrower’s economic capital without diluting the shares of existing investors or the founders. The product, which was developed in response to market needs three years ago, is now backed by the European Fund for Strategic Investments (EFSI), the financial guarantee from the EU budget which underpins the Investment Plan for Europe. EFSI support has helped the EIB to expand the use of venture debt considerably.
“We are proud of this unique funding product that met an urgent demand. Venture debt protects ownership, fuels growth, and helps to bring new technologies to the market,” said EIB Vice President Ambroise Fayolle, responsible for innovation, science and digital. ”If we want to support the market leaders of tomorrow, we need to take certain risks. We believe in the potential of the companies that we support and are committed to helping them grow by providing tailor-made financing.”
To mark the success of the new product, developed in cooperation with the European Commission, the Bank has held its first annual event for businesses benefiting from venture debt financing today. The “EIB Venture Debt Summit” brought together representatives of companies that received venture debt financing, investors and high representatives from the European Commission and the Grand-Duchy of Luxembourg.
The event saw the signature of a new EUR 20 million venture debt agreement with French biotech company Medincell. Medincell developed a new drug delivery system and received the most prestigious award for innovation in France in 2016.