The new development capital fund dedicated to innovative SMEs “INNOVATECH” was officially launched at a ceremony organised by the Deposit and Consignment Fund (CDC) and Smart Capital (SC), in partnership with the World Bank (WB), on Wednesday in Tunis.
The event was an opportunity to announce the start of the investment period of the Fund, which is part of the implementation of the project to support start-ups and innovative SMEs.
The 125 MD Fund will target SMEs with development programmes including investments in innovation and technologies in the sectors of education, health, FinTech, renewable energy, AgriTech, industry 4.0, ICT and electronics, big data, artificial intelligence and analytics, media and e-commerce and all technologies that would enable a digital transformation.
These SMEs must be financially sound, have been established for more than two years and have a workforce of between 10 and 200 and have a proven capacity for growth. An impact on competitiveness, employment and inclusive development are also sought.
The Fund operates on a co-investment basis and aims to mobilise the private sector in order to complete the financing schemes of the projects presented to it.
It invests in equity and quasi-equity with tickets ranging from 1 to 2.5 MD in the first round and can reach 7 MD in a second stage. The target exposure of the fund in the SME is between 35% and 40% and the investment period is 5 years (2022-2026).
The fund is created at the initiative of the CDC, and Smart Capital, the implementation unit of this project in its capacity as a management company. The fund was approved on July 23, 2021 and approved by the Financial Markets Authority on December 21, 2021. Innovatech is also the first fund to have adopted the form of SIF (Specialized Investment Fund) in Tunisia.
The project to support innovative start-ups and SMEs also includes a mechanism to prepare a flow of high-quality projects for Innovatech’s intervention. This component will provide grants for investment readiness and especially technology adoption to existing SMEs with a strong technological orientation and growth potential. A selection committee for grant recipients has been set up for this purpose.
The Innovatech Fund is part of the WB and CDC’s major project to support startups and innovative SMEs, said on this occasion, Managing Director of “Smart Capital”, Alaya Bettaieb.
He explained “as far as startups are concerned, the first fund of funds in Tunisia and Africa, ANAVA was launched last year. The good news is that one of the underlying funds financed by ANAVA is already operational and has already invested in three labelled startups.
“This year, in order not to create a dichotomy in the Tunisian economy essentially based on SMEs, we have created the Innovatech fund to support SMEs wishing to gain in competitiveness both nationwide and worldwide. This fund will finance an average of 10 innovative SMEs annually over 5 years, i.e. a total of 50 innovative SMEs, which will, in my opinion, enable us to change the SME ecosystem towards more innovation and added value,” he added.
For Minister of Economy and Planning Samir Saïed, “the launch of Innovatech is an important turning point for the Tunisian economy by mobilising the financial resources that have been so lacking in Tunisian talent.
He added, “by financing innovative SMEs, this fund will also enable Tunisia to move towards the knowledge-based economy which is now dominant in the world”.
“If we have missed the rise in global value chains during the 90s and 2000s, we must in no case miss the train of the knowledge economy,” said the Minister, calling on the Tunisian diaspora, wherever it is, to be a partner in any project that aims to put Tunisia on this path.
For her part, Minister of Industry, Mines and Energy, Neila Gongi said that the process of innovation has started for some years in Tunisia, driven by young Tunisian skills in all areas, but the link that has always been missing was that of funding because the traditional funding channels had a rigid perception of risk.
She added: “This fund will complete this missing link and contribute to the emergence of a new generation of innovative and future-oriented SMEs.
The Support Project for Innovative Startups and SMEs has received public funding via a World Bank loan amounting to $75 million (about 216 million Dinars), including $17 million (about 48.9 million Dinars) dedicated to financing the CDC’s subscription to the first closing of the InnovaTech Fund and $3 million (8.6 million Dinars) for the technology adoption component.
The project also finances the Fund of Funds (ANAVA) dedicated to the financing of VCs and startups, and the Flywheel programme to support the startup ecosystem, both launched on March 23rd 2021.
Source: Tap News Agency