• EIB signs EUR 75 million equity-type financing agreement with Danish NPI Vækstfonden.
  • Deal creates a co-investment platform to fill a market gap in Danish venture capital landscape through equity participations in local SMEs and Mid-Caps.
  • Agreement supported under Juncker Plan’s European Fund for Strategic Investments.

The European Investment Bank (EIB) has signed a financing agreement with the Danish national promotional institution (NPI) Vækstfonden in support of local SMEs and Mid-Cap companies. Both parties will inject EUR 75 million into a co-investment platform that will target SMEs and Mid-Caps for which bank financing can be scarce. The EIB financing is supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe, or Juncker Plan.

On a technical level, today’s agreement will allow Vækstfonden to provide a total of EUR 150 million (DKK 1.12 billion) for Danish businesses that are “ready for growth” or in their second phase of growth. These refers to SMEs or Mid-Caps that need investment to further innovate and expand their service and product offering, to increase their productivity levels and manufacturing capacity, or that want to expand internationally.

“I am pleased that Vækstfonden and the EIB have entered into this agreement. It is a unique and important agreement, which I am positive will have a significant impact on the Danish SMEs potential to grow and expand. Furthermore, it will be an important instrument to gear private capital and strengthen the Danish risk capital ecosystem” stated Simon Kollerup, Denmark’s Minister of Industry, Business and Financial Affairs.

EIB Vice-President Alexander Stubb commented: “SMEs and Mid-Caps are important drivers of innovation and job creation in Europe, and we are glad that the EU Bank can add value to the financing capabilities of Danish SMEs and Mid-Caps, by this equity-type operation with Vækstfonden. Collaboration with national promotional institutions is very important to us, and counts as a priority under the objectives of the Juncker Plan.”

Since the EIB usually finances up to 50% of the project, the investments under the co-investment platform will be made up 50/50 of EIB and Vækstfonden resources. Aiming for a ‘crowding in’ effect, the platform is expected to attract support from private investors, potentially doubling the total size of the platform to EUR 300 million.

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 Juncker Plan has been a success story for small and medium-sized companies. Already more than one million smaller companies across Europe are benefitting from improved access to finance. Today’s agreement with the Danish Growth Fund will make a positive impact on businesses in Denmark.”   

Claus Gregersen, Chairman of Vækstfonden, stated: “We are very happy to be working with the EIB on this facility, which is unique in Europe. This collaboration gives us the opportunity for substantial investments in Danish growth companies, thereby providing them with the capital they need to continue their growth journeys and ensuring that successful Danish entrepreneurs can continue their journey and expand globally from Danish soil”.

Background Information:

Vækstfonden, The Danish Growth Fund, is an independent fund governed by an independent legal act and an independent board of directors. The act concerning Vækstfonden stipulates that the fund must promote growth and renewal for small and medium-sized enterprises in order to achieve a greater socio-economic return. The fund contributes to the creation of new companies by providing capital and expertise. Since 1992, Vækstfonden has co-financed growth in more than 7,900 companies with a total commitment of more than DKK 24,9 billion. Vækstfondenprovides loans and guarantees in collaboration with Danish financial institutions and European partners.