EIF commits €20m to Swedish venture capital fund

The European Investment Fund (EIF) has committed SEK220m (€20m) to Swedish venture capital firm BackingMinds, supporting investment in early-stage businesses and entrepreneurs across the Nordic region that are often overlooked by traditional investors.

The investment will support BackingMinds Invest III, a fund targeting commercially promising start-ups, particularly those founded by women, entrepreneurs with immigrant backgrounds and businesses located outside major capital cities.

The fund will also focus on companies developing solutions to environmental and social challenges, including carbon emissions reduction, energy efficiency, healthcare and education.

The EIF, part of the European Investment Bank (EIB) Group, is the first institutional investor in BackingMinds Invest III. Its commitment is expected to help attract additional institutional investment into the fund.

Merete Clausen, Deputy Chief Executive at the EIF, said: “Europe cannot afford to leave talented entrepreneurs undiscovered simply because they are outside the traditional venture capital networks.

“BackingMinds has shown that promising businesses can be found in places and among founders that investors too often miss. By supporting this fund, we are helping to unlock that potential and bring more capital to companies tackling some of Europe’s most pressing challenges.”

BackingMinds has previously invested in 23 companies through its first two funds, with a focus on identifying entrepreneurial talent beyond established investment networks.

Of those businesses, 46% had at least one female founder, 43% had founders with immigrant backgrounds and 71% were established outside a capital city.

Sara Wimmercranz, Founding Partner at BackingMinds, said the latest investment would enable the firm to expand its approach to identifying underrepresented entrepreneurs.

“The future is never where you expect it, and neither are the founders building it. Some of the most innovative companies in the Nordics are being built where venture capital rarely reaches.

“A network is a filter. It lets through what already looks like the network and repeats the patterns of the past. As investors, we need to be more open and seek founders out. The EIF’s commitment lets us do that on a larger scale.”

The investment is backed by the European Union’s InvestEU programme through its Social Impact Equity component, which supports investment funds financing businesses that combine commercial growth ambitions with positive social or environmental outcomes.

The commitment forms part of the EIF’s wider efforts to improve access to early-stage finance and support innovation across Europe, particularly among businesses and founders that have historically faced barriers to venture capital investment.