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EU funding for Venture Capital and Private Equity funds

What is EU funding for VC and PE funds?

EU funding is most often associated with competition programmes to which innovative companies can apply directly. However, part of the EU funding is channeled to PFR Ventures, an entity that distributes funds between Venture Capital (VC) and Private Equity (PE) funds, which then fund innovative companies.

Recognised as the leading fund-of-funds manager in the CEE region, PFR Ventures plays an important role in shaping and strengthening the Polish Venture Capital (VC) and Private Equity (PE) sectors. As a public investor, PFR Ventures focuses its activities on investing in VC and PE funds, which then finance innovative Polish companies at various stages of their development - from early-stage startups, through companies developing research and development (R&D) activities, to those expanding into international markets.

PFR Ventures also supports entrepreneurship by working with a variety of investors, including business angels, private investors, and corporates, creating synergistic partnerships to jointly invest in VC and PE funds. With partial funding from European Union programmes and the Swiss Fund, PFR Ventures provides Polish companies with the capital they need to innovate and grow.

Managing seven funds of funds, PFR Ventures funds such Venture Capital funds as bValue, Atmos Ventures, BeyondNetZero, DN Capital, and Private Equity funds - Accession Capital Partners, Avallon MBO, CVI, Eurazeo (Smart City II). With more than a decade of experience, this firm maintains a leadership position in the VC and PE sector in Poland. Their activities not only contribute to economic growth but also support the development of innovation in the country, becoming a driving force for dynamically developing Polish companies.

PFR Ventures plays a key role in building the investment ecosystem in Poland, connecting diverse sources of capital with innovative ideas and companies. As a result, Polish companies have access to the necessary financial resources to implement ambitious projects and contribute to the international competitiveness of the Polish economy.

(source - https://pfrventures.pl/zrodla-finansowania.html)

 

 

Updated information on the edition

Fund managers will be able to apply for the new editions of the PFR Starter, Biznest, Open Innovation, KOFFI, and CVC programmes from 12 February 2024, with five series of calls planned by the end of the year.

The new funds from the European Funds for the New Economy (FENG) programme will enable the infusion of around 40 venture capital funds with a public contribution of PLN 2 billion and an additional PLN 1.1 billion from private investors. The new capital will stimulate various types of investment in start-ups, enabling them to meet the diverse needs of innovative companies: from funding prototypes to capital for international expansion.

 

 

Selected programmes for VCs:

1. PFR Green Hub FoF

The PFR Green Hub FoF is a programme for funds that want to invest in companies in the areas of green, renewable energy, and clean technology. The fund of funds is part of the umbrella project PFR GreenHub.

Fund profile: Ecology, RES, climate-tech

Funds available: PLN 200 million

Capital injections: Up to PLN 80 million

Private contribution: Yes, min. 50%

Investment process: Continuous call for proposals

Call availability: Active programme (contact us to learn more about the application)


 

2. PFR Starter

Dedicated to management teams who want to support innovative businesses at the earliest stages of development.

Fund profile: Incubation, start-up

Funds available: PLN 435 million

Capital injections: Up to PLN 4 million

Private contribution: Yes, min. 20%

Investment process: Cyclical calls

Call availability: The next call starts on 12 February 2024 (contact us to find out more about the application)


 

3. PFR Biznest

PFR Biznest is a programme aimed at boosting the activity of business angels in Poland and encouraging them to invest in young, innovative companies.

Fund profile: Seed, start-up

Funds available: PLN 126 million

Capital injections: Up to PLN 4 million

Private contribution: Yes, min. 50%

Investment process: Cyclical calls

Call availability: The next call starts on 12 February 2024 (contact us to find out more about the application)


 

4. PRF Open Innovations 

A programme dedicated to teams willing to manage VC funds to invest in SME companies working on research and development projects.

Fund profile: Early stage, growth

Funds available: PLN 266 million

Capital injections: Between PLN 5 million and PLN 60 million

Private contribution: Yes, min. 40%

Investment process: Cyclical calls

Call availability: The next call starts on 12 February 2024 (contact us to find out more about the application)

 

5. PFR KOFFI

PFR KOFFI is aimed at Venture Capital funds whose strategy focuses on investments in innovative companies at the growth, development, or expansion stage.

Fund profile: Growth and expansion

Funds available: PLN 298 million

Capital injections: Up to PLN 60 million

Private contribution: Yes, min. 50%

Investment process: Ongoing call

Call availability: The next call starts on 12 February 2024 (contact us to find out more about the application)

 

6. PFR NCBR CVC

Programme dedicated to teams willing to manage VC funds that will invest in SME companies working on research and development projects.

Fund profile: Early-stage, growth

Funds available: PLN 266 million

Capital injections: Between PLN 5 million and PLN 60 million

Private contribution: Yes, min. 40%

Investment process: Cyclical calls

Call availability: The next call starts on 12 February 2024 (contact us to find out more about the application)

 

Programme for Private Equity Funds:

1. PFR Private Equity

PFR Ventures also offers one programme for private equity funds.

Fund profile: Buyout, growth, mezzanine, private credit

Funds available: PLN 1.6 billion

Capital injections: From 20 to over 100 million PLN

Private contribution: Yes, min. 75%

Investment process: Continuous call for proposals

Call availability: Active programme (contact us to find out more about the application)

 

How can funding be obtained as a fund?

Two investment programmes are currently open - PFR Green Hub FoF for VC funds and PFR Private Equity for PE funds. On 12 February 2024, the next editions of the PFR Starter, PFR Biznest, and PFR Open Innovation programmes will open.

The process of submitting an application to take part in a call requires specialist knowledge of, among other things, formal requirements, and evaluation criteria. Prior experience in project writing and knowledge of the industry will maximise the chances of a successful application in the call.

The application process will include:

  • formal assessment - the "Access Criteria" will be verified, related to the necessity of fulfilling the basic conditions necessary for a successful evaluation of the grant application. For example, two members of key staff meeting the requirement to commit a minimum of 80% of their professional time to the fund or providing a verifiable history of capital investments made.
  • substantive assessment - qualitative criteria related to specific aspects of the planned activities will be analysed. For example: experience of the team, market strategy, proposed management fee, ESG, or distribution of portfolio returns.
  • in-depth economic, legal, and compliance analysis (due diligence) - the analysis aims to verify all information relevant to the assessment. This may include, in particular, verification of the reported experience and reputation of the team or confirmation of the legal and financial capacity of the fund concerned.

Feel free to contact our experts for more details and professional support throughout the process.


 

Why do we think funding is not going directly to startups?

Some programmes allow startups to obtain direct funding (some of which we have described in this article), but there are several reasons why, in our opinion, some of the funding is provided indirectly.

  • Specialisation and Experience: VC funds have expertise and experience in identifying, evaluating, and managing investments in start-ups and other innovative companies.
  • Support and Development of the Startup Ecosystem: PFR Ventures aims not only to generate profits but also to support and develop the startup and innovation ecosystem in Poland. By funding VC funds, PFR Ventures helps not only to develop start-ups but also to increase the experience of VC and PE funds in Poland.
  • Management Efficiency: Managing direct investments requires significant time and resources. Investing through VC funds enables PFR Ventures to manage capital efficiently by utilising external management teams operating in the commercial marketplace
  • The long-term strategy for the development of the VC fund market: the VC fund investment model is often more in line with PFR Ventures' long-term goals, such as supporting the business, technology, and entrepreneurship environment in Poland.

This approach enables PFR Ventures to make effective use of its resources while contributing to the development of the VC and PE fund environment and innovative enterprises in Poland.