The New Business Venture Fund has launched a new investment initiative targeting early-stage startups. The goal of the initiative is to support the financing of up to 15 new companies each year, accelerate their formative stages, strengthen governance, and at the same time attract other investors.
The Fund’s role is to foster the growth and development of Icelandic business through investments in startups and to promote innovation in line with government priorities.
During its strategic review in autumn 2022, the Fund assessed the financing environment for innovative companies and considered how it could become an even stronger driver of innovation in Iceland. The Fund places special emphasis on investing in companies early in their development, particularly where market gaps call for its involvement. In this way, the Fund does not compete with other investors but instead helps to bridge the gap between startups and private investors.
The Fund plans to invest up to ISK 200 million annually through this initiative in the coming years. Financing will come from the Fund’s own evergreen capital and is therefore subject to its financial position at any given time. The first phase of the initiative will be carried out in May and June, with investments of up to ISK 100 million across several companies. Investments will be made early, in a simple format, but one condition is that shareholders or new investors must provide matching funds. To qualify, a company’s business idea must show strong growth and export potential and be based on technological or market-driven innovation. It is also considered an advantage if the core team is diverse in background, experience, and expertise relevant to the company’s progress. Individual investments by the Fund will range from ISK 5–25 million, with a requirement for at least the same amount from private investors. Companies can choose between two investment structures: a convertible loan, or a forward agreement for equity purchase in the spirit of SAFE agreements.
Unlike the Fund’s regular investments, this initiative has a dedicated application process. Companies must apply in this first round by May 31. All details on the initiative and application process can be found at www.nyskopun.is/atak
Several information sessions will also be held, the first of which takes place at the Fintech Cluster in Gróska at 10:00 on Thursday, May 4. Event link here.
