The situation of innovative companies and start-ups in the Czech Republic is starting to look better. The Minister of Industry and Trade (MPO) Jan Mládek has signed an agreement with the European Innovation Fund (EIF) last week.
Based on this agreement a venture capital fund will be set up. It will ensure the implementation of the program “Rizikový kapitál”, which is a venture program under the “Operační program pro podnikání a investice pro konkurenceschopnost” (OPPIK), which aims to promote the investment environment of small and medium enterprises (SMEs) in the Czech Republic.
How much money will be earmarked for the fund?
MPO has earmarked 40 mil. EUR for the venture fund from the European structural funds. The sum of 10 mil. EUR will be contributed to the fund by the EIF as well. Additional funds will be provided by private investors.
“Initiative which we are launching now, represents a new step for the public funding of innovation in the Czech Republic. The aim is to support Czech start-ups in their access to capital to finance their development,” said about the agreement with the EIF the Minister of Industry and Trade, Jan Mládek.
This agreement represents the first step of government´s support of the Czech start-up environment. EIF will be responsible for the selection of the management team which will obtain additional investment capital for selected start-ups. Therefore, selected innovative companies will come in touch with investment experts, and not only the government officials.
“We are thrilled that the Czech Republic, represented by our partners from MPO decided to join other countries in the region and use the experience of the EIF in providing venture capital to SMEs in early stages of their development and with strong growth potential. It should encourage the development of the entire national ecosystem of the capital financing,” said the Director of Administration mandates EIF, Hubert Cottogni.
The new fund will be launched this year
Selection of management team will be done this year and the entire process of investing in innovative companies and startups should thus start by the end of the year. Efforts to help the Czech start-up environment is appreciated, since according to statistics of the European Union (EU), the Czech Republic is not investing much in start-up companies, compared with other EU member states.