Luxembourg's new Digital Tech Fund to finance ICT start-ups
The Luxembourg Government announced the launch of a seed fund created jointly with a group of private investors to support the financing and development of start-ups operating in the field of information and communication technologies (ICT), considered as a key sector for the diversification of the national economy.
Named 'Digital Tech Fund', the fund was set-up on the initiative of the Ministry of the Economy as part of the national “Digital Lëtzebuerg” initiative. It will acquire stakes in promising innovative companies of less than seven years of age which have preferably already developed functioning prototype of their products. The fund will especially – though not exclusively – aim to invest in areas such as cybersecurity, FinTech, Big Data, Digital Health, the media and the next-generation communication networks, digital learning, the internet of things or telecommunications and satellite services.
Set up according to the principle of an 'evergreen fund', the Digital Tech Fund will also be aiming to facilitate the transfer of new technologies from public research, particularly from the Interdisciplinary Centre for Security, Reliability and Trust (SnT) at the University of Luxembourg.
The Digital Tech Fund is managed by Expon Capital whose team was selected because of its strong track record in investment management. The Luxembourg Government invested EUR 5 million in the Digital Tech Fund. The other investors contributed a total of EUR 15.33 million, including EUR 3 million from Société Nationale de Crédit et d'Investissement (SNCI) and EUR 1 million from the University of Luxembourg.
Developed under a public-private partnership, the fund also includes the following partners (in alphabetical order): Arendt & Medernach, Banque Internationale à Luxembourg SA (BIL), Expon Capital, High Capital, POST Capital, Proximus and SES.
Deputy Prime Minister and Minister of the Economy, Étienne Schneider, stated: "In meeting the financing needs of start-ups in their launch phase, the Digital Tech Fund rounds off the national ecosystem for promoting the development of young innovative companies in the field of ICT. Augmenting the existing financing instruments and government support measures such as the Fit4Start programme, the various support regimes of the Ministry of the Economy or the Luxembourg Future Fund, this new investment vehicle further enhances Luxembourg's appeal for start-ups and will help attract new innovative businesses."
Karim Michel Sabbagh, SES chairman and CEO: "Continuously developing Luxembourg, an open and interconnected economy in the heart of Europe, relies on attracting the right intellectual capital. Such highly mobile and international talent seek the best clusters of intellectual inspiration and funding – places where audacity will be stimulated. Luxembourg has a lot to offer to such talent thanks for instance to the University of Luxembourg, several government support instruments, the proximity of financial and industrial experts, and now the Digital Tech Fund. Established private companies will benefit as well as making it easier for us to attract talent and innovative ideas ourselves."
Alain Rodermann, founding partner at Expon Capital : “Our team has a combined 30 years of experience in venture capital in well-known companies and close to 50 investments in Europe and the US. As asset managers, we put our expertise to work for entrepreneurs, particularly in laying the foundations for successful international growth.”