On Monday 10 June 2024, Luxembourg's Ministry of the Economy reported that the second generation of the "Digital Tech Fund" aimed at the development of early startups in the Grand Duchy has reached the final close at €19.4 million.
On 20 May 2024, Expon Capital officially announced the final closing of the second generation of the Digital Tech Fund at €19.4 million, in which the Luxembourg Government and the SNCI national credit and investment institution participate alongside BIL, POST Capital, Proximus, SES, the Luxembourg Chamber of Commerce, Cargolux and a group of private investors.
Venture capital firm Expon Capital was chosen in 2016 to manage the Digital Tech Fund, an early-stage fund newly created to support the development of the startup ecosystem in Luxembourg, noted the ministry.
Following the success of the first two vintages which invested in thirteen startups, the launch of a new vintage was announced in June 2023 with the aim of continuing the fund's mission in supporting the financing needs of innovative startups in their early stages.
Given that the commitment from private and corporate investors have surpassed the €15 million mark, the Ministry of the Economy increased its commitment from an initial €3 million in summer 2023 to €4 million, and the SNCI did the same with a total investment of almost €2.3 million. Alongside investments from BIL, POST Capital, Proximus, SES, the Luxembourg Chamber of Commerce, Cargolux and a few private investors, this second generation of Digital Tech Fund thus reached the final closing of €19.4 million. The funds raised will be invested in innovative companies established less than seven years ago in Luxembourg or abroad, which commit to developing their presence in Luxembourg. The fund is dedicated to companies developing digital products or services.
The ministry added that, by continuing its efforts to support startups in the early-stage phase through the Digital Tech Fund, the government aims to "increase the number of startups in the ecosystem, facilitate innovation and finance today's best startups, which are tomorrow's scale-ups".
The fund has already made its first investment in the company Videobot, which offers an interactive video solution for medium and large enterprises and "revolutionises" the digital customer journey. The company already has more than 100 clients worldwide, including Proximus and PwC. Expon Capital is actively seeking investment opportunities founded by ambitious entrepreneurs.
Luxembourg's Minister of the Economy, SMEs, Energy, and Tourism, Lex Delles, commented: "Luxembourg aims to build a community of entrepreneurs capable of developing innovative solutions to meet current challenges. The Digital Tech Fund is a key financing instrument in this context. It allows companies at an early stage of their development to access capital when they often do not have access to traditional sources of financing."
Luxembourg's Minister of Finance, Gilles Roth, added: "The completion of the fund-raising in the second generation of the 'Digital Tech Fund' demonstrates Luxembourg's commitment to developing the Luxembourg startup landscape, including FinTech and artificial intelligence, and contributes to strengthening the competitiveness of the Luxembourg economy, particularly our financial sector. More than 200 FinTech companies currently established in Luxembourg offer our financial institutions new growth opportunities, whether by improving their efficiency or creating new sources of revenue. I therefore welcome this initiative which aims to support these young companies in their innovative projects and further diversify our economy."
Alain Rodermann, Managing Partner of Expon Capital, explained: "Given the success of the first generation of the Digital Tech Fund, the second generation will continue with the same strategy: the portfolio will consist of early-stage companies, which we will help grow quickly and expand across Europe."
Jerome Wittamer, Managing Partner of Expon Capital, concluded: "The country has fantastic talents, people currently working for large companies, often leaders in their field. Some of them have relevant insights into identifying an unmet need in their company or affecting their clients. If you combine their deep understanding with a clear vision of the most effective solution to solve the problem and the ability to realise it, it can lead to the creation of highly efficient digital solutions and sometimes very successful companies. Our door is wide open to these entrepreneurs."
