MGR: Please give us an overview of Equifund.
Mr. Skalkos: Equifund which was established in 2016 by the Hellenic Republic together with the European Investment Fund (EIF) is widely regarded as a paradigm of use of EU funds to support equity financial instruments. It is a risk capital fund-of-funds with the purpose of facilitating access to equity financing and developing the TT/acceleration, early-stage and growth stages of the equity market in Greece.
It is financed by the European Community and national funds. Its purpose is to strengthen the venture capital market in Greece encouraging innovation and attracting more private sector investment. Equifund’s investment strategy includes 3 windows: The Innovation window, the Early stage and the Growth stage window. Each Greek start-up or SME can have access to the right financing depending on its stage.
The original EUR 200 million allocation by the Operational Programme for Competitiveness financed by EU and public resources was coupled with resources from the European Investment Bank Group. The nine fund managers (which were selected through a competitive tender under the exclusive responsibility of the European Investment Fund) achieved further leverage of other market-oriented investors boosting the overall size of the facility to EUR 494 million.
Provisional figures indicate that by 31.03.2021, after almost three years of investment activity, more than EUR 187 million had been invested to 115 companies employing 3,658 at the time of first investment. More than 70 of the supported companies had less than 3 years of business history at the time of first investment.
Overall, the investments cover 47 sectors of economic activity in all regions of Greece and across all investment stages of Venture Capital and Private Equity.
MGR: Covid19 pandemic had devastated effects all over the planet, but it is a fact that with every crisis comes an opportunity. How did the pandemic affect entrepreneurship and innovation in Greece?
Mr. Skalkos: Amidst the dire economic situation that marked the year 2020, EquiFund fund managers achieved three exits of which, the exit of Think Silicon to NASDAQ quoted Applied Materials marked the biggest deep-tech start-up exit ever in Greece based on publicly available data, while the exit of Instashop set a new record amount (EUR 360m) for a Greek start-up exit.
Evidently, the COVID crisis had an impact on most EquiFund investees, which undertook swift measures to face the challenges and increase their runway. Some sectors have been and still are affected more than others; EquiFund portfolio companies operating in these sectors were fast in adopting contingency plans, trying to pivot their activities and / or undertake all cost-cutting measures needed to weather the
crisis. They have exhibited remarkable resilience.
A large number of EquiFund companies contributed to the fight against coronavirus or supported the community.
At the same time, the investment activity continued: within 2020, 26 new investees were added to EquiFund portfolio and the aggregate investment volume increased by EUR 74m.
MGR: Which sectors will attract the most US interest and investment in the postpandemic era?
Mr. Skalkos: The sectoral breadth of the EquiFund initiative is remarkable and we have witnessed the leverage of investors outside the EquiFund funds: it is estimated that the aggregate investment amount of the EquiFund funds is doubled at the time of their investment and amplified even further at subsequent financing rounds. Many of these investors come from outside Greece.
Going forward we see investment opportunities arising from the areas of semiconductors, transport & logistics, enterprise software tools, cybersecurity, energy, agrotech, fintech, real estate, hospitality, as well as marine & gov tech. Having said that, we witness that Greece has already started to play a role in the Health/Biotech sector – approximately 21% of the companies under the EquiFund innovation window operate in the health/biotech space, some of which have received investment from US-based funds or collaborated with US healthcare companies.
MGR: In what ways can Equifund collaborate with the US entities looking to invest and partner up in Greece?
Mr. Skalkos: Such channels of collaboration have already been established. With regards to the innovation window particularly: the portfolio features companies that are US-based and have their product development teams in Greece; it also features companies that have received co-investment by US venture capital funds.
The EquiFund fund managers continue to pursue strategic partnerships and collaborations between US companies and EquiFund investees and they also showcase innovative portfolio companies and talented teams for pilot projects and potential investments in follow-on (A+) rounds. Most importantly, they promote awareness on the Greek ecosystem, which is characterized by highly talented human capital, Lower cost of operations (compared to the US), employee loyalty and a continuously improving tax and industrial policy environment.
MGR: What is your final message to our readers in Washington DC, and the US in general, regarding Equifund and the technological and innovation potential of Greece?
Mr. Skalkos: Since its establishment, Equifund is supporting research and innovative entrepreneurship in Greece. It has been significantly effective and more entrepreneurs are encouraged to start up new businesses in the country attracting private investment. The Greek government is increasing the funding in research and innovative sector (included in the new programming period of 2021-2027) as there is potential for further development. We are happy to see investing interest from the US. Greece and US have strong historical and cultural bonds and have mutual feelings of trust. We hope and believe the collaboration will be continued and EIF would be the mean to encourage this collaboration in the future.