September 19 (SeeNews) - Prague-based Tilia Impact Ventures launched its 32 million euro ($34.2 million) second fund, which will support companies in Central and Eastern Europe (CEE) with an environmental, social and governance (ESG) focus, it said.
The fund, which has held its first closing at 26 million euro, will back mission-driven entrepreneurs from CEE with the aim of spurring systemic improvements in climate, education and healthcare solutions, the seed-stage, sustainability-focused impact investor said in a press release on Monday.
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Major investors in the second fund are the European Investment Fund (EIF), via the InvestEU programme, which is designed to enhance sustainable investment, innovation and job creation in the 27-member union, as well as Ceska Sporitelna Bank, part of Austria's Erste Group. The fund also attracted as backers a number of prominent Czech businessmen, among which Libor Winkler of RSJ, Zbynek Frolik of Linet, Ondrej Bartos of Credo, Jan Barta of Pale Fire Capital, Tomas Vala of Siko, and Vaclav Kurel of Benefit Plus.
The fund is already in advanced negotiations on several deals, which are yet to be announced. Among the countries which the fund targets are Bulgaria, Czechia, Hungary, Poland, Romania, Slovakia, Estonia, Latvia and Lithuania.
" 'Systemic change' is the key concept for us. We are investing in technologies and business models which can transform entire industries and systems, rather than only bringing temporary benefit," Andrew Gray, general partner at Tilia Impact Ventures, said.
Tilia Impact's second fund addresses a traditional shortage in institutional capital in the venture capital sector in CEE, and especially in impact investing, promoting strategies to generate financial return while creating environmental or social benefit, the seed-stage firm noted.
According to Tilia Impact co-founder and general partner Silke Horakova, a strong need for additional capital to support change-makers in the CEE region has emerged since the launch of its first fund. The second fund's larger size has the potential to address that shortage and make a difference at scale, she said.
Tilia Impact Ventures has been active since 2018. Its funding strategy allocates 50% of capital to social and people-related investments, notably in technologies advancing education and training, social inclusion, health and well-being. The other half of the funds are earmarked for climate and environment, through commitments in the areas of grid decarbonisation, electrification of transportation, sustainable food production, industrial sustainability, innovations for emissions reduction, and the circular economy.
A typical investment ticket provides an initial equity or convertible debt funding of up to 1.5 million euro and has a one to seven years' investment horizon, according to the firm's website. Tilia Impact's inaugural fund invested in Czech IT company DatLab, which develops tools to combat corruption in public spending, Hungarian start-up Munch which aims to minimise food waste, Polish alternative pre-school e-platform developer The Village, and Bulgaria-active pre-loved fashion platfrorm Nold, among others.
($ = 0.9362 euro)