The International Finance Corporation (IFC) from the World Bank Group will enter the capital of a new fund managed by Horizon Capital – Horizon Capital Growth Fund IV (HCGF IV) with an equity commitment of $30 million, and the European Bank for Reconstruction and Development (EBRD) with an equity commitment of $50 million.
According to the information on the corporation’s website, the project has been approved and the relevant documents are pending signing, this will be the first IFC investment in Ukraine since the start of the full-scale war that began in February 2022.
The EBRD said that its board of directors approved entry into HCGF IV on 6 September.
The target size of the new fund is $250 million. IFC said that the Fund will invest primarily in fast-growing technology and export-oriented mid-cap companies, primarily active in Ukraine and Moldova, benefiting from cost competitive local platforms with global reach.
The Fund will make investments of $10-30 million to acquire minority stakes in 10-15 mid-cap companies with enterprise values of $50-150 million.
According to the materials, HCGF IV is the successor fund to Emerging Europe Growth Fund III (2017 vintage) and will follow a similar investment strategy focusing on IT services and products, as well as e-commerce, innovative consumer goods, and fintech.
IFC recalled that it invested in EEGF III and EEGF II (2008), while the EBRD was an investor in EEGF III and EEGF II, as well as HCGF II.
IFC’s commitment through its own-account is critical for the Fund to reach its minimum first close size of $100 million and IFC’s continued participation is expected to support the Fund to reach a final close size of $250 million, the IFC said.
“This is a landmark event – despite the war, IFC decides to provide money for investments in Ukraine. This should be a positive signal for other potential investors: you can and should start investing in the Ukrainian economy now,” First Deputy Prime Minister, Minister of Economy of Ukraine Yulia Svyrydenko said, commenting on the IFC decision.
According to the Ministry of Economy, the German Investment Corporation (DEG), the Swiss Investment Fund for Emerging Markets (SIFEM), the Dutch Entrepreneurial Development Bank (FMO), the Western NIS Enterprise Fund, the Rockefeller Foundation are also planning to join the HCGF IV fund and others.