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Overview: about the EBRDWho we are
Overview: about the EBRD
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Explore the EBRD’s journey over the decades, investing in businesses, supporting economies and driving lasting change across its regions.
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Overview: how the EBRD operates
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Light
Eng
Eng
Financing for Innovation
September 2023
An evaluation of the Venture Capital investment Programme I (2012–19)
Background
The Board approved the Venture Capital Investment Programme (VCIP) I in September 2011 with an envelope of €100 million. Its principal objective was to “support the development of technology innovation and its commercialisation and promote venture capital investments in the (Countries of Operation) COOs”. The Bank expected to achieve these high-level objectives by (i) deploying funds in its economies and helping to close the financing gap in the VC markets — as measured by portfolio indicators, (ii) demonstrating market expansion – as measured by profitable exits, increased revenue, employment, and number of patents filed by portfolio companies, and (iii) encouraging VC to increase its marginal presence in EBRD economies — as measured by capital invested by co-investors, encapsulating new investors in follow-on financing rounds, and first-time investors in EBRD economies.
Between 2012–21, the Bank, alongside co-investors, invested in 15 companies in 9 countries, deploying €68 million under the programme. Of 15 investments, 11 are completed.
Main findings
The rationale for establishing a direct VC investment vehicle was and remains valid. The design and objectives of the programme were relevant to the local companies and investors as there was a sizeable VC financing gap in EBRD economies. Co-investors and wider stakeholders broadly confirm the validity of the programme’s objectives and design.
The financial success of the portfolio contributed to the development of the VC ecosystems, but its impact on innovation has been limited. Based on available data, it appears that the programme performs on a par with European venture funds from the same vintage years of 2011, 2012, 2013 and 2014. On the other hand, in terms of supporting competitiveness through innovation, the programme has been only partially effective. The companies in which the Bank invested in the programme had innovative business models. Generally, in terms of imitating and adapting globally available technologies to local markets, the portfolio companies were successful. However, only a few demonstrated global ambitions. Against the expectation at the approval, none of the portfolio companies filed a single patent application. Further, there have been no investments in the two technology sectors explicitly mentioned in the approval document – cleantech and semi-conductors and materials.