2 May 2023 16:39

U.S. DFC invests $25 mln in Horizon Capital fund, alongside 17.3 million from French Proparco, $15 mln from Swedfund and Finnfund each, and $5 mln from Danish IFU - Ukraine

MOSCOW. May 2 (Interfax) - The United States International Development Finance Corporation (DFC, formerly known as OPIC) has invested $25 million in the charter capital of a new fund of the Horizon Capital investment company, Horizon Capital Growth Fund IV (HCGF IV), which reported a total investment of $254 million.

"I am proud of DFC's equity investment in Horizon Capital's latest fund, to provide growth stage companies in Ukraine with the capital they need to create jobs and opportunities for the Ukrainian people across important sectors," the Ukrainian media quoted as DFC CEO Scott Nathan as saying at the signing ceremony in Kiev on April 28.

French Ambassador to Ukraine Etienne de Poncins signed the agreement on investing 17.3 million euros in HCGF IV on behalf of Societe de Promotion et de Participation pour la Cooperation Economique (Proparco) and Agence Francaise de Developpement (AFD) at the ceremony attended by Ukrainian President Vladimir Zelensky.

"This is a new largescale French project to support the Ukrainian economy and development of the Ukrainian IT sector," the ambassador said on a social network.

Swedfund International AB (Swedfund) and Finnish Fund for Industrial Cooperation (FinnFund) announced $15 million investment each and noted the importance of the Ukrainian IT sector, which withstood the crisis, for national development, creation of jobs, and generation of foreign-currency revenue.

Danish Investment Fund for Developing Countries (IFU), a participant in the previous fund EEGF III, contributed another $5 million to the new fund. IFU plans additional investments from funds available to Ukraine, including potential projects, together with Danish partners ready to expand current operations or enter new enterprises contributing to Ukraine's economic recovery and development potential, the Ukrainian media quoted an IFU press release as saying

Executives from the aforesaid funds attended the signing ceremony and met with Ukrainian government officials, members of the Presidential Office, and businessmen in Kiev.

It was reported earlier that the International Finance Corporation from the World Bank Group had become the biggest participant in the new fund HCGF IV by contributing $30 million during the first round of the fund establishment, which ended in September 2023 and drew a total of $125 million, besides another $30 million invested in the latest round.

Another major party to HCGF IV is the European Bank for Reconstruction and Development, whose initial contribution stood at $40 million. Other investors were Deutsche Investitions-und Entwicklungsgesellschaft (DEG) and its subsidiary KfW Group, Dutch Entrepreneurial Development Bank (FMO), Swiss Investment Fund for Emerging Markets (SIFEM), Western NIS Enterprise Fund and Zero Gap Fund set up by the Rockefeller Foundation and John D. as well as Catherine T MacArthur Foundation.

In all, the fund unites about 40 institutional investors. It is expected to reach $300 million.

According to IFC, the fund will invest $10 million to $30 million in minority stakes in ten to 15 companies in Ukraine and Moldova with average capitalization and value ranging from $50 million to $150 million. According to corporate materials, HCGF IV is the successor to $200 million raised by EEGF III, which was fully formed in 2017, and would follow a similar investment strategy focused on IT services and solutions, e-commerce, innovative consumer goods and fintech.

Horizon Capital is a large investment company managing six direct investment funds (over 40 institutional investors) with assets totaling $1.4 billion, including WNISEF (with $150 million capital), Emerging Europe Growth Fund (EEGF, $132 million), EEGF II ($370 million) and EEGF III ($200 million), and HCGF II ($258.3 million). The funds have invested in over 160 companies with over 77,000 employees in Ukraine and Moldova.