The European Investment Fund (EIF), with the support of InnovFin Equity and COSME, is investing €20 million in ACT Venture Capital’s latest fund, ACT V, in Ireland. The agreement will allow ACT to finance around 30 high potential early and expansion stage companies in the information and communication technology sector in the coming decade. By mobilising other investors, including funds from the private sector and EIF, this equity investment by EIF should lead to overall investments of more than €90 million for primarily Irish SMEs looking to expand internationally.

This agreement was made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the European Commission’s Investment Plan for Europe, the so-called “Juncker Plan”. The Investment Plan is already expected to mobilise over €3.4 billion in investments in Ireland and €225 billion across Europe.

The investments made by the new fund – set up by ACT – will focus on expansion financing in high-growth, export-oriented companies in sectors such as software, internet, digital media, communications and mobile. The fund includes investment from the Ireland Strategic Investment Fund (ISIF), Enterprise Ireland (EI), Allied Irish Banks (AIB) and private investors, and aims to back 15-18 expansion companies over the next four years and will invest up to €7 million in each company. Some of these companies will come from ACT’s “seed fund” activities which backs early-stage companies at a rate of 8-10 deals per year and having already completed over 50 such deals.

The agreement was announced on the day of IBEC’s corporate breakfast seminar. Speaking at the event, EIB Vice President, Andrew McDowell said: “The EIB Group is a firm believer in the potential of innovative companies in Ireland, this is why we are delighted that the EIF is partnering with the ACT Venture Capital Fund. The transaction will help to strengthen the Irish VC ecosystem and endorse an experienced second generation team now raising its first full scale fund. EIF’s commitment is also critical to ensure that the fund closes at its target size and I am convinced that ACT Venture Capital will ensure that companies can access this finance soon. The health of the European economy rests on its ability to innovate and EU support remains a key component. This cooperation clearly contributes towards those efforts.”

European Commissioner for Agriculture and Rural Development Phil Hogan said: “Ireland is a global leader in the online, tech and digital space with vast potential to do even more. Assisting companies in highly competitive markets in the start-up and scale-up stages of their development can make a crucial difference. I am glad that the European Commission’s “Juncker Plan” is playing an important role in helping innovative, small companies access the finance they need to develop new products, expand operations and create jobs. I wish those businesses that are set to benefit from this financing every success as they take their next steps.”

John Flynn, Managing Director of ACT Venture Capital, said “This fund will help to sustain Ireland as one of Europe’s most active locations for technology venture funding”. Mr Flynn added that “ACT is keen to partner with leading entrepreneurs where we can exploit our international network to help them expand. We are also delighted to announce the expansion of our investment team with addition of Conor Mills and Tomas Miranda who bring key sector knowledge from their experiences in Paddy Power, Google and McKinsey. Collectively, we are eager to partner with the next generation of Ireland’s most ambitious entrepreneurs and help them become international success stories”.

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