The fund seeks €1 billion to invest in technology firms. European startup funding has not rebounded to 2022 levels. The European Investment Bank’s venture capital arm has contributed €350 million ($379 million) to Spain’s largest venture capital fund. This is part of a European strategy to support local companies and prevent them from migrating outside during an investment recession.
The Kembara fund aims to invest €1 billion in climate and deep-tech firms in Europe, with a focus on “scale-ups” who have previously received first funding rounds and are seeking funds to expand, according to an EIB statement issued on Monday. The European Investment Fund will operate as an anchor investor, which fund administrators hope will attract further outside funding.
The investment is part of the 2023 European Technology Champions Initiative, which aims to provide funding to developing entrepreneurs in important fields including artificial intelligence and cybersecurity. Historically, Spain has fallen behind several other significant European countries in terms of startup investment. According to the sources, it placed seventh in 2023 in VC funding with €2.2 billion, trailing only the UK, France, and Germany.
The ETCI has so far invested in eight European technology funds, as well as €240 million directly in Spanish companies, notably Factorial, a provider of human resource software.
The effort comes amid a decline in private entrepreneurial finance during the Covid-19 outbreak. When some internet services’ growth slowed when lockdowns ended, funds reduced their investments. Investors invested over €16.3 billion in European startups in the first quarter, up from 2023 but down more than 50% from Q1 2022.
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