The European Investment Fund (EIF) and LfA Förderbank Bayern are expanding their successful partnership for startups. The LfA-EIF Facility, a fund of funds aiming to improve financing conditions for innovative companies, will receive an additional €25 million from both LfA and the EIF, bringing its total to €300 million. LfA and the EIF are therefore increasing their share to €150 million each.
The fund was created on the initiative of the Bavarian Ministry of the Economy, LfA and the EIF, and has been investing in venture capital funds in Bavaria since 2009. The aim is to broaden the availability of venture capital for small and medium-sized technology companies in the state. So far, commitments have been made to around 50 funds and business angels which are headquartered or have offices in Bavaria. More than 100 Bavarian companies have already benefited from investments by the LfA-EIF Facility.
EIF Chief Executive Alain Godard commented:“The EIF is delighted to further expand its commitment to the LfA-EIF Facility which supports small and medium businesses in Bavaria. This facility invests in venture capital funds to help companies gain access to finance. Our commitment will continue to help promote the financing of businesses by new and existing fund managers.”
Bavarian Minister of the Economy and Chairman of LfA’s Administrative Board Hubert Aiwanger said:“Access to venture capital is and remains one of the biggest challenges for startups. Especially in comparison to other countries and economic areas, the funding opportunities available in Germany still harbour room for improvement. The increase in the LfA-EIF facility is therefore coming at the right time and will also complement our new ScaleUp Funds and Pillar II instruments.”
Chairman of LfA’s Management Board Otto Beierl added:“Our partnership with the EIF to increase venture capital availability in Bavaria has been a great success. For every €1 we have invested in the EIF fund of funds, €14 in additional capital for Bavarian companies has been generated so far. This means that our funds flow back to Bavarian high-tech entrepreneurs many times over in the form of equity capital. We are now once again expanding our commitment to benefit Bavarian startups. I am delighted that we can continue to provide entrepreneurs and businesses with effective support and therefore further strengthen the future viability of our economy.”
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s small and medium-sized enterprises (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments tailor-made for specific customers. EIF financing fosters EU objectives in support of entrepreneurship, innovation, growth, employment and regional development.
Founded in 1951, LfA is the state-owned specialist promotional bank for small and medium-sized enterprises in Bavaria. In principle, promotional loans are applied for and granted via companies’ core banks. In addition to low-interest promotional loans, LfA takes on risk through sureties, indemnities and guarantees together with equity capital through LfA Group-associated companies (BayBG Bayerische Beteiligungsgesellschaft mbH and Bayern Kapital GmbH). LfA also backs infrastructure projects to strengthen Bavaria’s profile as a business location. In 2020, LfA’s total support for the Bavarian economy, including its special coronavirus programmes created to cope with the economic consequences of the crisis, amounted to around €4.34 billion.