A week ahead of the launch of what the European Investment Bank (EIB) dubs a “new generation of joint financial instruments providing support to innovative companies”, the EU’s bank has provided entertainment company Rovio with 25 million euros in financing to boost development of its mobile gaming platform and other entertainment services.
The Finnish Angry Birds maker has to date raised relatively little venture capital considering its size and trajectory ($42 million according to CrunchBase data), and the EIB hasn’t traditionally been in the news as financier for technology companies. Expect the latter to change.
As the EIB points out, the Rovio loan is only the first in a series of upcoming transactions meant to spur growth for innovative startups.
It’s no secret that the oft-talked about ‘lack of risk capital’ available to technology ventures in Europe is actually something of a myth in the early stages of startups in established ecosystems, with an increasing amount of business angels, accelerators, seed funds, early-stage VCs and equity crowdfunding platforms eager to finance and support upcoming stars across the continent.
The real problem lies in the lack of growth capital, the larger and riskier financial bets in medium-sized tech companies on the verge of breaking through – ask any European tech startup where it can raise rounds between, say, 25 million and 100 million euros, and the response will often be “definitely not in Europe”. For those kinds of bets, startups often head to the US or, increasingly, Asia.
The new financial instruments, which will be presented by the EIB and the European Commission on 12 June, have been designed with this gap in mind, with as guiding principle that tech startups should be able to ‘build in Europe and stay in Europe’.
More on that when said instruments are formally introduced next week.
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