News

The European Commission approves FoF proposal for relaxed access to equity instruments

29.04.2020

On Thursday, 23 April 2020, the European Commission authorised the Fund of Funds (FoF) to apply relaxed terms of access to equity instruments and other support for the most vulnerable segment of the economy – small and medium-sized enterprises and especially startup companies.

The resources for equity investments at FoF’s disposal are in the total amount of EUR 150 million (ca. BGN 294 million). Most of them are already available to startups and innovative companies through the four investment funds of the FoF. These funds will support 400 companies which are at different phases of their business history and develop key innovations in biotechnology, robotics, IT, pharmaceuticals and other sectors.

The new terms aim to strengthen the companies which have the potential to drive post-crisis economic recovery and foster sectors that generate high added value.

According to the European Commission’s decision, FoF resources can reach these addressees faster and at a relaxed regime until the end of this year. The FoF is working to add further flexibility in order to enable startups to continue their development even in an unfavourable economic environment.

First, the threshold below which individual investments will not be conditioned upon the leveraging of additional private capital has been raised to EUR 800 000 (ca. BGN 1.6 million).

In addition, equity financing will also be available to startups that have been experiencing difficulties caused by the COVID-19 pandemic after 31 December 2019.

The overarching objectives of these measures are to improve the survival outlooks for startups and SMEs, support entrepreneurship and foster sustainable business models.

Equity investments under the relaxed terms approved by the European Commission will be available from the four funds supported by the FoF until 31 December 2020.