The Digital Tech Fund, established by the Ministry of Economy, is a seed fund that the government created together with a group of private investors to support the funding and development of start-up companies in the field of information and communication technologies (ICT), which is considered a key sector of the national economic diversification.
This fund is part of the strategy 'Digital Lëtzebuerg' in which the state seeks to strengthen and consolidate the eminent position of the country in the field of ICT. As a consequence, the state participates in the fund with a budget of € 5 million. The financial contribution of other investors amounts to a total of 15.33 million euros, of which 3 million are from the National Credit and Investment Company (SNCI) and one million euros from the University of Luxembourg.
With this grant, the fund will support start-up ICT companies, and will complete the national ecosystem favourable to the development of young innovative companies in the field of ICT.
How does it work?
To support the development of ICT start-ups, the fund will take stakes in promising innovative enterprises created less than 7 years ago, and who develop products that already exist, preferably in the form of functional prototypes. The fund will focus primarily, but not exclusively, on venture capital investments in areas such as cybersecurity, FinTech, Big Data, Digital Health, media and the next-generation communication networks, digital learning, the 'Internet of Things' or satellite telecommunications and services.
Designed along the lines of an 'evergreen' fund, the Digital Tech Fund will also aim to facilitate the transfer of new technologies from public research, especially the University of Luxembourg's Interdisciplinary Centre, for security reliability and trust (SnT), with which a partnership to support the creation of spin-offs is being finalised.
A strong partnership in a beneficial environment
Operational from May 2016, the Digital Tech Fund will be managed by Expon Capital SARL. The Digital Tech Fund will be established as partnership limited by shares (SCA). Developed as part of a public-private partnership, the fund's other stakeholders are (in alphabetical order): Arendt & Medernach, Banque internationale à Luxembourg SA (BIL), Expon Capital, High Capital (BHS Services), POST Capital, Proximus and SES.
The Digital Tech Fund is part of a series of instruments dedicated to the development of ICT activities in Luxembourg. Thus, together with the existing instruments of financing and public support measures such as Fit4Start programme, the various aid schemes of the Ministry of Economy and the Luxembourg Future Fund, the fund supports the development and maintenance of an enabling environment for the establishment and development of ICT activities.
(Source: press release of the Ministry of the Economy)