Warsaw, Poland, —An IFC anchor investment in a new private equity fund managed by Innova Capital will provide growth capital to mid-sized businesses in Central and Eastern Europe, enabling them to expand operations and accelerate digitalization. The funding will help boost the resilience of the private equity market in the region amid the COVID-19 pandemic and at a challenging time for capital-raising in the region.
IFC is investing €40 million in Innova 7 by Innova Capital, a top-tier private equity fund headquartered in Poland. The fund will focus on companies in the technology-driven sectors, mainly in Poland and Romania, and help them grow through acquisitions and market expansion. IFC’s support will channel much-needed funding to companies that face capital constraints, a growing problem given the global economic slowdown and geopolitical challenges in the region. IFC will also help the fund increase gender diversity and strengthen its investment strategy.
Innova is committed to align with the Paris Agreement, an international treaty on climate change, by setting targets at the fund level and with each investee company, to promote emission reduction goals in the medium term eventually reaching net zero target by 2050.
“We are delighted that IFC has decided to invest in our seventh fund, after having entrusted us with capital during the fundraising for Innova 6 a few years back. It is a sign that Innova is a trusted and long-term partner for institutional investors,” said Krzysztof Kulig, Senior Partner at Innova Capital. “We believe that our fund management experience, know-how, and the relationship we have developed with IFC so far, will be the basis for the next stage of fruitful cooperation.”
Amid a challenging fundraising environment, IFC’s financing package will help the fund reach its final closing target of €300 million. The investment is part of IFC’s work with private equity funds that have the capacity to provide growth capital and industry expertise to promising businesses across the region. This is IFC’s second investment in funds managed by Innova Capital.
“Through our continued partnership with Innova Capital, we aim to support mid-sized firms in the region in their effort to raise growth capital, improve governance, and embrace technological innovation” said Ary Naïm, IFC’s Regional Manager for Central and Southeast Europe. “The financing will help sustain investments and promote market recovery, at a time when both Poland and Romania are impacted by the war in Ukraine and are also called to play a key role in the post-war period”.
IFC has supported the development of private equity funds in its Europe Region for over 20 years. To date, IFC has invested over $470 million in 21 private equity funds across Central and Eastern Europe.