The information was translated using the ChatGPT service.
On August 15 of this year, the Cabinet of Ministers approved a new support program for venture capital investments in business from the European Union Structural Funds to promote the creation and development of new, innovative companies with high growth and productivity potential in Latvia.
"Start-up entrepreneurs and rapidly growing innovative companies often do not have access to commercial bank loans, as these companies do not meet the credit policy of commercial banks due to insufficient operating history, net revenue flow, collateral, equity, and difficult-to-predict turnover growth. At the same time, the contribution of such companies to the economy and the long-term growth of Latvia's national economy is vitally important," emphasizes Minister of Economy Ilze Indriksone.
The support program provides for the establishment of three venture capital funds for startups, one early-stage venture capital fund, and one growth-stage venture capital fund, in which selected financial intermediaries from the public financial institution Altum, by attracting private co-financing, will establish the aforementioned venture capital funds to ensure the availability of venture capital investments for companies. This will facilitate financial accessibility, providing alternatives to commercial bank financing, and simultaneously promote the development of the venture capital sector.
Under the program, the total available public funding is 93 million EUR, respectively in the venture capital funds for startups (together 3 funds) the available funding is 55.8 million EUR, in the early-stage venture capital fund – 12.4 million EUR, and in the growth-stage venture capital fund – 24.8 million EUR.
In the three venture capital funds for startups, the early-stage venture capital fund, and the growth-stage venture capital fund, by the end of 2029, it is planned to support 400 companies (of which at least 300 are startups) and 300 new jobs will be created. By supporting companies, it is planned to pay at least 12 million EUR in taxes each year and reach at least 20 million EUR in exports annually. In total, it is estimated that approximately 50 million EUR will be invested and private investments of at least 31.6 million EUR will be attracted.
The maximum support amount in the Startup Venture Capital Fund for one company is envisaged in the form of pre-seed money support - 250,000 EUR and seed money support - 1,500,000 EUR. Whereas, the maximum support amount in the Early and Growth Stage Venture Capital Funds for one company in the early-stage venture capital fund is 2,000,000 EUR, in the growth-stage venture capital fund - 4,000,000 EUR.
The program conditions stipulate that the financial institution Altum will choose financial intermediaries and their offered financial services in an open and non-discriminatory selection procedure, applying the conditions of public procurement regulation.
Ministry of Economics