EIB signs a EUR 25 million ‘quasi-equity’ financing deal with podcast company Acast for R&D and international expansion
Agreement supported by Juncker Plan’s European Fund for Strategic Investments
The European Investment Bank (EIB) has signed a EUR 25 million quasi-equity financing agreement with podcast company Acast. As well as independent podcasts, Acast also looks after the audio content of larger publishers, such as the Financial Times, the Guardian, Vogue, Aftonbladet and Billboard. The EIB financing is supported by theEuropean Fund for Strategic Investments (EFSI), the main pillar of theInvestment Plan for Europe, or Juncker Plan.
Acast will use the financing to expand its research and development activities and to further develop its audio content distribution platform. The company is headquartered in Sweden and its services are available in 10 countries. A part of the project costs will go into supporting its international market expansion. The peculiarity of the‘quasi equity’ financing, which the EIB is only able to support with the backing of the Juncker Plan, is that it has the characteristics of an equity stake in the company, yet does not translate into the EIB owning shares in Acast. This type of financing addresses a market failure for non-dilutive growth capital for European businesses: providing equity without affecting the ownership of the company.
European Commission Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “The main motivation for creating the Juncker Plan was to provide alternative sources of financing to innovative companies in need of financial support that struggled to obtain a traditional bank loan, and as a result to boost jobs, growth and investment in the EU. Today’s agreement between the EIB and Acast does exactly that, and it does so using a novel form of financing. I wish the company every success with its expansion plans.”
“The EIB’s investment and support of Acast is a true milestone in our company's growth as well as in the future of the global podcasting infrastructure. Today, we are one step closer to our goal of seeking out and supporting all the audio storytellers of the world - giving their stories the audience they deserve,” said Leandro Saucedo, Chief Business Officer of Acast.
EIB Vice-President Alexander Stubb, added: “Everyone loves a good podcast, but it can be hard to make a living off of this type of infotainment. I think it’s important that a European provider for this type of service exists, which gives all voices the possibility to be heard. Acast truly serves as a one-stop-shop for listeners, creators and advertisers, and we’re happy to support the company in its expansion.”
The EIB financing to Fiat Chrysler Automobiles N.V. (NYSE: FCAU/ MTA: FCA) (FCA) for manufacturing ever-safer battery electric vehicles and plug-in hybrid electric vehicles increases to almost €800 million. Investments will be mainly in plants located in southern Italy – strongly supporting employment and compliance with the strictest environmental criteria.
This wide-ranging collaboration between the bank of the European Union and the Lazio Region will lead to funding of €500m in all production sectors in the coming years. This is the goal of the agreements already signed or still being finalised that were announced today by Dario Scannapieco, Vice-President of the EIB, and Nicola Zingaretti, President of the Lazio Region, and which are also intended to support the post COVID-19 recovery.
The EIB will provide €100 million to the Valencia Region for the reconstruction of infrastructure damaged in late 2019 by extreme weather caused by a phenomenon described as “isolated high altitude depression” – or a “DANA” as it is known in Spain – and by Storm Gloria in early 2020. The objective is to get industry and tourism in the affected areas up and running again and to restore basic services infrastructure. The financing will also be used to mitigate the effects of any similar weather events that may occur before the end of 2021. Divided into two tranches of €50 million each, the loan will also help improve the region’s climate resilience, promoting investments in flood prevention and a better response to future adverse weather events.