Launched in 2016 on the initiative of the Ministry of the Economy with a group of private investors, the Digital Tech Fund invests in innovative companies created less than 7 years ago and which develop products or services that preferably already exist as a working prototype. Endowed with a financial envelope of €20.33 million in total, the pre-seed and seed fund is managed by venture capital firm Expon Capital.

Equity investments in 13 start-ups

So far, the Digital Tech Fund has invested in 13 technology start-ups. These include, for instance, financial industry smart analytics and data management automation specialist Next Gate Tech, cybersecurity start-up Passbolt and manufacturing optimisation software developer Wizata. With these equity investments, the fund has almost completed the deployment of its initial investment capital in this portfolio. The intervention of the fund enabled the 13 companies concerned to attract financing of €120 million in capital, in particular by foreign funds.

Digital Tech Fund a key instrument

Franz Fayot at the launch of the new compartment of the Digital Tech FundTo ensure the continuity of the Digital Tech Fund over the next few years, the Luxembourg state is participating, together with a group of investors, in the creation of a new compartment of the fund. With €14 million at its first closing, this new compartment was financed by the current shareholders (BIL, Post Capital, Proximus, SES and SNCI) and by new investors such as the Chamber of Commerce, Cargolux as well as several private persons. The state’s participation in the launch of the new compartment amounts to €3 million through the budget of the Ministry of the Economy, to which is added €1.5 million from state investment bank SNCI.

“The Digital Tech Fund is part of the existing financing instruments and public support measures such as the Fit 4 Start programme and the various support from the Ministry of the Economy, which help make Luxembourg a welcoming place for start-ups and attract new innovative activities,” says Minister of the Economy Franz Fayot. “In addition, the fund plays an important role in identifying and helping the most promising start-ups in their international growth.”

“The second phase of the Digital Tech Fund will certainly consolidate the progress made over the last few years in the development of the start-up and fintech landscape in Luxembourg,” comments Minister of Finance Yuriko Backes. “I’m happy to see that particular attention is paid to the impact of investments aimed at promoting sustainable characteristics. This new chapter will undoubtedly intensify innovation in Luxembourg, support the growth of future innovative leaders and contribute to the creation of quality jobs.”

Photo: © MECO