The European Investment Bank (EIB) has invested up to €20 million in a co-investment facility with Sabadell Venture Capital S.L. to support early-stage Spanish start-ups affected by COVID-19.
Sabadell Venture Capital will match the EIB co-investment with its own contribution of €20 million, resulting in a total of €40 million for venture debt operations in start-ups, entering scale stages, affected by the pandemic-induced economic crisis. Most of the investments will target Spanish small and medium-sized enterprises (SMEs) in all sectors, with a strong emphasis on tech companies.
The operation is backed by the European Guarantee Fund (EGF) venture debt, part of the European Union's €540 billion package to address the economic impact of COVID-19. The venture debt product of the European Guarantee Fund enables the EIB to address a venture debt deficit linked to structural market failures across the European Union.
EIB Vice-President Ricardo Mourinho Félix said: “The EIB is committed to ensuring that innovation-driven Spanish businesses can access finance, expand and create jobs. The pandemic has reduced the access of these companies to equity, hampering their growth (especially for early-stage companies). The European Guarantee Fund and the experience of Sabadell Venture Capital will enable us to provide the liquidity that companies need to continue investing in their growth.”
BS Deputy General Manager and BS Capital Managing Director Raúl Rodríguez added: “This alliance between Sabadell Venture Capital and the EIB is yet another step forward in covering the financing needs of growth-stage startups, which until now were restricted to international lenders. The venture debt product is relatively new to Spain, with current providers covering amounts up to €2-3 million. The alliance with the EIB will enable Sabadell Venture Capital to offer venture debt solutions of up to €10 million, providing startups with access to less dilutive resources to finance their growth.”