HORIZON CAPITAL GROWTH FUND IV

Promoter – Financial Intermediary

HORIZON CAPITAL GP IV LLC

Location

• Ukraine
• Moldova, Republic of

Description

Horizon Capital Growth Fund IV is a generalist fund supporting the growth of small and medium-sized enterprises (SMEs) active in Ukraine and Moldova.

Additionality and Impact

The operation concerns an investment in Horizon Capital Growth Fund IV - USD 300m fund, providing growth and expansion capital in the form of equity and quasi-equity instruments in established, export-oriented companies and late-stage technology leaders with global and regional revenues benefitting from significant pool of technical talent in Ukraine and Moldova. The project will address the gap in financing for SMEs at a time where access to finance is limited and cost-prohibitive, further exacerbated by the current geopolitical turbulence. Furthermore, it will have a significant impact on (i) supporting job creation in Ukraine and Moldova, particularly among the youth; (ii) expanding the digitalisation and digital services within the countries (iii) promoting and maintaining gender balance and gender smart practices within the fund and portfolio companies; and (iv) raising ESG and corporate governance in portfolio companies.

The project aligns strongly with the priority areas of NDICI - Global Europe, in supporting critical projects that ensure innovation via digital connectivity and entrepreneurship; sustainable development by ensuring sustainable investment in SMEs, Mid-Caps that are able to to withstand the macroeconomic shocks in the region, further supporting the EFSD+ priorities of creating high-value jobs and supporting the expansion of SMEs towards regional economic integration and connectivity.

Furthermore, the project will support The Europe Initiative (TEI) for Moldova, Moldova - Growth and Jobs that aims to contribute to the longer-term social and economic resilience of the local communities of the Republic of Moldova through enhance business and job opportunities and provide equal opportunities for all (gender, age, ability, or nationality) which are development priorities also envisaged by the proposed operation. 

Additionally, it will advance the strategic development priority under the EU cooperation and support in 2021? 2027 is guided by the 2020 Joint Communication on the "Eastern Partnership policy beyond 2020: Reinforcing Resilience, an Eastern Partnership that delivers for all" which commits to investing in people, proposing a new deal for youth that highlights human capital development including education reform and opportunities for young people.

The commitment of EIB into the Fund will have a strong demonstration effect in confidence-building towards Ukraine in businesses, entrepreneurs and international investors, highlighting the investment opportunities and sustainable development. The EIB participation will support the Fund in reaching its target size and will ensure the full implementation of the intended investment strategy. Moreover, the EIB investment will further ensure the adoption of best practices in the areas of governance and sustainable development. EIB will provide input into the environmental and social policies of the Fund and will support the integration of gender lens in its investments.

It is expected that the project will advance the following Sustainable Development Goals ("SDGs"): SDG 8 - Decent Work and Economic Growth; SDG 9 - Industry, Innovation and Infrastructure; SDG 10 - Reduced Inequalities.

Objectives

Horizon Capital Growth Fund IV - USD 300m fund, providing growth and expansion capital in the form of equity and quasi-equity instruments in established, export-oriented companies and late-stage technology leaders with global and regional revenues benefitting from the significant pool of technical talent in Ukraine and Moldova. The project will have a significant impact on: (i) supporting job creation in Ukraine and Moldova, particularly among the youth; (ii) expanding the digitalisation of the countries; (iii) promoting and maintaining gender balance and gender smart practices within the fund and portfolio companies; (iv) increasing access to finance for MSMEs at a time where growth finance is and cost-prohibitive, further exacerbated by the current geopolitical turbulence; (v) raising ESG and corporate governance in portfolio companies.

Sector(s)

• Services - Financial and insurance activities

Proposed EIB finance (Approximate amount)

EUR 25 million

Total cost (Approximate amount)

EUR 278 million

Environmental aspects

The Fund will comply with the Environmental and Social Policies of the Bank.

Procurement

The Fund will comply with the procurement policies of the Bank.

Status

Signed - 19/12/2023