Finance Minister Konstantinos Petrides has long sought to introduce a financial instrument to support start-ups and innovative companies with equity financing, adding that the agreement with the European Investment Fund to manage this new financial instrument is of paramount importance and a milestone in the government’s efforts to expand alternative financing.
In his speech at the event for the Cyprus Equity Fund, the first publicly supported equity fund in Cyprus, delivered by the Permanent Secretary of the Ministry, George Panteli, Petrides said: innovation ecosystem of Cyprus, which over the past few years has already shown a steady growth in investment in research and innovation and active international scientific cooperation”.
The fund, he added, according to a press release issued by the ministry, will also help further develop the nascent venture capital market by providing an opportunity for local and international venture capitals to operate and invest in Cyprus.
He said the government’s commitment and confidence in the project is evident from the increase in the initially approved support by 10 million euros to a total of 30 million euros. In addition, he recalled that the Equity Fund was included in the Cyprus National Resilience and Recovery Plan.
“This amount will be supplemented by private capital. We have set the bar high for the participation of private investors in the Fund, as attracting private resources is one of the main goals of the Fund and an important element of its long-term success,” he added.
According to Petrides, the fund, which will be created as a result of the process of declaring the EIB as a European Investment Fund, will use the market experience of stakeholders to adequately address the lack of equity financing by supporting innovative entrepreneurship with the necessary initial and subsequent investments. This will benefit new and growing Cypriot startups and an innovative ecosystem traditionally based on government grants, business angels , incubators and accelerators.
In addition, the minister stressed that the contribution of entrepreneurship and innovation to economic prosperity has increased as the world economy has moved to a mode of production in which knowledge has become a key factor. “The challenges of the knowledge economy are critical to growth. Active entrepreneurship and the development of small and medium-sized businesses are among the most important conditions for successfully meeting the challenges of an ever-evolving global economy,” he added.
Petrides concluded by saying that “there is a positive side to the Covid crisis; it is accelerated and enhanced EU support for the green and digital economy, mainly expressed through the Resilience and Recovery Fund and the InvestEU Initiative.”