Horizon Capital closes HCGF IV fund for Ukraine, Moldova at $350 mln, $100 mln above target
MOSCOW. Feb 26 (Interfax) - Horizon Capital, a U.S. private equity firm investing in export-oriented high-growth companies in Ukraine and in the region, has held the final closing of Horizon Capital Growth Fund IV, L.P. (HCGF IV) at $350 million, exceeding the target by $100 million.
"With this successful closing behind us, we embark on a new chapter, focused on partnering with Ukraine's entrepreneur-champions," Ukrainian media quoted Founding Partner and CEO of Horizon Capital Lenna Koszarny as saying in a statement issued by the company.
It is noted that the final closing took place in Tokyo on February 19, boosting Horizon Capital's total assets under management to $1.6 billion. The fund provides growth capital by partnering with entrepreneurs who lead high-growth, predominantly technology and export-oriented businesses, as well as select domestic market champions, in Ukraine and Moldova, with a pipeline of more than 80 investments.
HCGF IV is backed by investors with a combined capital base of over $700 billion, in particular, international financial institutions the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) through its EU for Ukraine Fund, DFC, DEG, FMO, JICA, Proparco, SIFEM, Swedfund, Finnfund, WNISEF, IFU, joining forces with global institutional investors, foundations and family offices, the statement said. These private investors include funds managed by abrdn Private Equity, Blue Earth Capital, Zero Gap Fund, an impact investing collaboration between The Rockefeller Foundation and the John D. and Catherine T. MacArthur Foundation, Marcin Zukowski, Co-Founder of Snowflake, Andy Kurtzig, Founder and CEO of JustAnswer, investors and philanthropists George and Rayla Myhal, and other investors.
Horizon Capital noted that HCGF IV has already concluded three investments to fast-growing, innovative tech companies, providing growth capital to expand their R&D platforms in Ukraine and enhance their international reach: Preply, GoIT and Viseven.
Koszarny said a month ago that in the fourth round, following which the size of HCGF IV grew from $298 million to $328 million, its major investor was EIB through the EU for Ukraine Fund with 25 million euros. As reported, the formation of the new HCGF IV fund started in October 2021 and negotiations were actively underway before the crisis began. During the first round, which was announced at the end of September 2022, $125 million was raised, while in May 2023 Horizon Capital said it would be increased to $254 million, and at the end of September to $298 million.
IFC, as one of the parties, said that the fund will invest $10 million - $30 million to acquire minority stakes in 10-15 companies in Ukraine and Moldova with a mid-capitalization and a value of $50 million - $150 million. The corporation's materials say that HCGF IV is the successor to the $200 million EEGF III, the formation of which was completed in 2017, and will pursue a similar investment strategy focused on IT services and products, as well as e-commerce, innovative consumer goods and fintech.
Horizon Capital is a major investment firm managing six private equity funds (over 40 institutional investors) with $1.6 billion in assets, which also include WNISEF (with $150 million in capital), Emerging Europe Growth Fund (EEGF, $132 million), EEGF II ($370 million), EEGF III ($200 million) and HCGF II ($258.3 million). The funds were invested in over 170 companies employing over 80,000 people in Ukraine and Moldova.