European Investment Fund pledges €90 million to propel Portuguese deep tech, cybersecurity start-ups

The European Investment Fund (EIF) is committing a total of €90 million to three funds that incorporate Portuguese venture capital to accelerate the growth of start-up companies primarily in the country’s deep tech and cybersecurity sector in Europe.

The EIF pledges, announced at this year’s Web Summit in Lisbon, will enable the three funds – Armilar Venture Partners IV, Faber Tech III, and 33N Cybersecurity and Infrastructure Software Fund – to leverage more than €400 million of capital for tech start-ups, with operations already underway.

The new financing highlights international confidence in Portugal as a technology hub while demonstrating the critical role of the EIF in promoting strategic investments in the technology sector in Europe.

“We are very pleased with this achievement to boost Portugal’s entrepreneurship, venture capital, and venture capital sectors,” emphasized the Portugal Minister for the Economy, Pedro Reis, who was present when the investments were announced. “I strongly believe that start-ups and scale-ups will be critical for the digital and green transitions, driving the innovation that is indispensable to achieve them and, ultimately, our goals for sustainable economic growth. Our venture capital funds have a key role to play thanks to their ability to finance disruptive innovation.”

“We are excited to support the next generation of innovation through these venture capital funds, which play an essential role in accelerating the growth of tech start-ups and in bolstering digital security in Europe,” said Marjut Falkstedt, EIF Chief Executive. “Our collaboration with local and international partners underlines our commitment to creating a robust and resilient ecosystem in the field of technology.”

The EIF is part of the European Investment Bank Group. Its core mission is to support micro, small and medium-sized enterprises in Europe by helping them access finance. The EIF designs and develops venture capital, guarantee, and microfinancing instruments that are specifically aimed at this market segment. In this capacity, the EIF fosters the EU objectives of supporting innovation, research and development, entrepreneurship, growth, and employment.

The InvestEU program provides the European Union with crucial long-term funding by leveraging private and public funds in support of Europe’s sustainable recovery. It helps to mobilize private investments for the European Union’s top policy priorities, such as the European Green Deal and the digital transition. The InvestEU program brings together the multitude of earlier EU financial instruments, making access to finance and investments in European companies and projects simpler, more efficient, and more flexible. 

The InvestEU program consists of three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects, benefiting from the protection of the EU budget guarantee of €26.2 billion. The full budgetary guarantee backs the investment projects of the implementing partners, increasing their risk-bearing capacity and thus mobilizing at least €372 billion of additional investment.

The commitments by the EIF, which is part of the European Investment Bank (EIB) Group, are backed by the InvestEU program aiming to mobilize over €372 billion in additional investments between 2021 and 2027.

The 33N Cybersecurity and Infrastructure Software Fund, which specializes in cybersecurity and infrastructure software, has already held its first closings, having conducted four investments while continuing to raise upto €150 million. The team, with over 10 years of experience, has invested in more than 20 start-ups and has a solid track record of exits, with investors selling their stakes in the start-ups, and three unicorns. Its strategic focus is on cybersecurity companies in the global growth stage, including the European markets, UK, Israeli and US. Part of the investment in this fund is supported by the Luxembourg Future Fund 2 (LFF 2), developed in collaboration with the Société Nationale de Crédit et d’Investissement (SNCI).

Faber is a team specialized in early-stage investment in science-based companies, having invested in over 50 deep tech start-ups, including one unicorn. The new fund, Faber Tech III, aims to support the first stages of start-ups in applied science fields such as AI for specific industries, robotics, computational biochemistry, data infrastructure, and new computing technologies. The fund will focus on the Iberian Peninsula and Southern Europe, with selective investments across the rest of Europe and occasionally beyond.

With 25 years of experience and a track record of investing in more than 80 start-ups, including some of Portugal’s unicorns, Armilar Venture Partners is one of Portugal’s most established venture capital funds. The new fund, Armilar Venture Partners IV, aims to mobilize between €120 million and €250 million, supported by institutional investors, including the EIF. The fund’s strategy is to focus on start-ups with technological differentiation in areas from computing to AI, health tech to space tech, cybersecurity to productivity, with a primary focus on Portugal and Spain, as well as across Europe.