From this year on the state-owned Széchenyi Venture Capital Fund Management Ltd. can invest nearly EUR 225,6 million in small and medium sized companies through five funds. The equity programmes primarly help small business innovations, with special focus on industrial development, either stepping up in the supply chain, cross-border expansion or product development.
Since 2019 Széchenyi Venture Capital Fund Management Ltd. contributes to the financing of Hungarian SMEs through five capital funds with different aims. The first fund of the fund manager, the Széchenyi Venture Capital Fund has been in operation for nearly nine years, and was expanded to HUF 22 billion (EUR 70 million) in September 2017. At the same time Carpathians Venture Capital Fund was established with HUF 20 billion (EUR 63,5 million) in order to support cross-border expansions. Last year the National Stock Exchange Development Fund made its first investment (took part in the capital increase of Megakrán Nyrt.), while Irinyi Venture Capital Funds – investing in industrial development projects – have started to operate with a total of nearly HUF 16 billion ( EUR 50,8 million).
The program focuses on innovative industrial enterprises
Széchenyi Capital Fund Management Ltd. is able to provide adequate funding for a wide range of Hungarian SMEs from this year on with fund totalling close to HUF 71 billion (EUR 225,6 million). Investments are primarly targeted at growth-capable, innovative companies. In the upcoming years, hundreds of such Hungarian businesses can get financed due to the programmes. As a result of the investment, the given fund acquires ownership of the company for a specified period of time, typically 4-5 years, the stake in every case is not higher than 49 percent. The investment is repayable, typically the founders buy back the share in the company after the investment period.
In Hungary the innovative medium-sized enterprise stratum, which could be the backbone of the economy, is quite thin compared to Germany for instance. There aren’t many industrial and family-owned businesses that are competitive and long-term focused, therefore the aim of the fund manager is to support businesses to reach that level. Considering the fact that Hungarian industrial companies have enourmous innovation potential, it is the fund manager’s mission to support their improvement.
Programming school, kick scooter and an aviational firefighter training center among the latest investments
In the past six months Széchenyi Venture Capital Fund Management Ltd. has made 10 investments of nearly HUF 2.8 billion (EUR 8,9 million) in total. As a result, the number of investments made by the fund manager has increased to 111 and the total value of capital investments is close to HUF 16 billion (EUR 50,8 million).
In 2018 Széchenyi Venture Capital Fund Management Ltd. invested in private programming school Green Fox Academy to support the launch of its programme targeting young mothers and its expansion in Prague, as well as invested in a wooden kick scooter of Hungarian design, „Boardy”. Through the Carpathians Venture Capital Fund a Transsylvanian logistics organizer Euro Dori Transport Kft., and software license manager IPR-Insights group targeting expansion in Romania were financed to help their expansion in Romania.
Besides the investments, successful exits took place as well: The leather coated automative component producer Schaefer-Oesterle Kft. carried out developments of nearly one billion forints over three years and doubled its headcount until the exit; whileSYSX that develops a system for improving the efficiency of welding machines and ShiwaForce that provides unique content management systems and behavioral online solutions were two IT exits successfully carried out.