The EBRD welcomes the success of the new equity growth fund in Ukraine

• EBRD welcomes successful interim close through groundbreaking Horizon Capital Growth Fund IV
• New Fund Exceeds Goal and Achieves Major Milestone by Raising $254 Million by 2^nd closing
• Fund, to which the EBRD committed US$40 million at first close, invests in growth stocks in Ukraine and Moldova

The European Bank for Reconstruction and Development (EBRD) welcomes the successful fundraising efforts of Horizon Capital Growth Fund IV (HCGF IV), which closes today and reaches $254 million.

The pioneering fund, in which the EBRD invested, was created to invest in growth stocks in Ukraine and Moldova, ranging from an average of USD 10 million to USD 30 million, with a focus on technology and export-oriented SMEs. medium-sized enterprises (SMEs).

When the fund was launched last September, the EBRD committed up to US$40 million (€40 million) to HCGF IV, managed by Horizon Capital, a leading private equity manager in Ukraine and Moldova and a long-standing client of the EBRD. After the initial close in September 2022 at $125 million, Horizon continued its fundraising efforts and has now reached an interim close of $254 million, which is a remarkable achievement in the context of this wartime Ukraine-focused fund. .

The EBRD’s investment is in line with the bank’s commitment to invest €3 billion in Ukraine in 2022-2023. The Bank has steadfastly supported Ukraine since the Russian invasion last year, focusing on investments in energy and food security, vital infrastructure, trade and support for the private sector. The aim is to support and provide a livelihood for companies affected by the war.

“In the context of the war against Ukraine, the ambition of HCGF IV is unprecedented and we are excited about its fundraising success,” said Hassan El Khatib, EBRD Managing Director, Equity. “The fund will not only improve the resilience of private capital markets in the region by developing private equity as an alternative source of finance, but also drive inclusion by providing support to companies affected by the war. Through this investment, the EBRD and its international partners effectively bridge a funding gap caused by adverse market conditions by engaging a private equity fund to add to the available funding pool.”

The fund’s first-close investors, in addition to the EBRD, included the International Finance Corporation (IFC), DEG – Deutsche Investitions und Entwicklungsgesellschaft, the Dutch Entrepreneurial Development Bank (FMO), the Swiss Investment Fund for Emerging Markets, the Western NIS Enterprise Fund, and the Zero Gap Fund, an impact investing partnership between The Rockefeller Foundation and the John D. and Catherine T. MacArthur Foundation.

New investors joining the fund at this interim close include US International Development Finance Corporation (DFC), Promotion and Participation Company for Economic Cooperation (Proparco), Swedfund International AB (Swedish fund), Finnish Fund for Industrial Cooperation Ltd. (Finding Finns) and Danish Investment Fund for Developing Countries (THE CLOUD).

HCGF IV also announced at its mid-term close that it has become the first fund in Central and Eastern Europe (CEE) to achieve 2X Flagship Fund status. As such, it will help promote women’s economic participation as entrepreneurs, managers and employees.

Russia’s war against Ukraine has presented unprecedented challenges to the Ukrainian economy. Some companies have ceased operations, while others have been forced to adapt to a new reality of logistical disruptions, fuel shortages, relocated production facilities and staff, tighter currency controls and funding shortfalls. However, Ukrainian companies have shown great resilience, while technology-oriented SMEs have proven their importance to the economy since the beginning of the war and contributed to the country’s economic revival.

HCGF IV will maintain Horizon Capital’s focus on technology and export-oriented companies, started more than a decade ago, building on Horizon Capital’s US$200 million contribution to Horizon Capital’s information technology (IT) sector in 2017 , also supported by the EBRD.