After a pre-announcement in December 2015, the new Digital Tech Fund was announced on April 12th with 20 million Euros of public and private funds.
The new fund targets local startups with less than 7 years and featuring innovative products or validated prototypes. The fund will be managed by Expon Capital, a recently established VC player backed by investors and entrepreneurs with 20 years of experience in the digital space and notably in the fields of flash memory, mobile data, ecommerce, digital media, online video, big data, telecommunications, among others. Startups will be able to raise a maximum of €1,6 million from the fund which targets cybersecurity, fintech, big data, digital health, media, next generation communication networks, digital learning, internet of things. telecommunication and satellite-related services.
The funding of this public-private partnership comes from the Ministry of the Economy (€5M), the SNCI (€3M) – both public entities; the private players Post Capital (€3M), Proximus (€1.5M), Université du Luxembourg (€1M), together with Arendt & Medernach, Bil, Expon Capital, High Capital (BHS Services) and SES, the five committing 6.5M with individual contributions of at least €1M.
This new resource to Luxembourg startups will be operational from May 2016 and is expected to complement the existing funding offer available to startups such as the Fit4Start or the Luxembourg Future Fund. It is expected to attract and foster innovation and talents to Luxembourg of which the already established players may also bennefit in the future.
The launch of the Digital Tech Fund follows the creation of the Luxembourg Future Fund in April 2015 with €150M. In opposition to the Digital Tech Fund, the Luxembourg Future Fund is a fund of funds and targets businesses which are not yet established in Luxembourg. Its goal is therefore to attract new businesses and talents to Luxembourg rather than supporting local startups from scratch. Less than one year from its announcement, this EIF managed fund has already made its first €20M investment in Paladin European Cyber Fund. This new fund is part of the Washington-based Paladin Capital Group and will focus exclusively in cybersecurity and is expected to bring along other co-investors interested in the sector.