Venture capital house SmartCap launches new deep tech fund for Estonian startups: Here’s all you need to know

SmartCap is a small fund manager registered with the Estonian Financial Supervision and Resolution Authority, a subsidiary of KredEx. It manages a state venture capital fund with €80M. As per the company, SmartCap’s vision is to make Estonia’s capital market work by providing VC investments, which would enable ambitious and innovative Estonian companies to grow globally.

SmartCap’s new deep tech fund!

SmartCap has announced that it will make a cornerstone investment of €15M. The new fund manager will raise additional capital from private investors. The deep tech fund will invest in companies with product or service and business model predominantly based on scientific research and development, as well as commercialisation of intellectual property.

A private fund manager for the fund will be chosen via an open call. SmartCap is welcoming both first-time teams and existing fund managers from Estonia as well as abroad. During the selection process, it will evaluate the fund manager’s team composition, experience, and competence, envisioned investment strategy, and terms of the new deep tech fund. The selection of the new fund manager is planned to be finalised in Q3 2021, and the expressions of interest can be submitted until 1 March 2021.

“The presence of local patient capital is crucial for starting deep tech companies since this determines whether they go from research projects to scalable global businesses” highlights Sille Pettai, Fund Manager at SmartCap.

Additional capital from private investors

The creation of Estonian deep tech-focused investment fund is a market-shaping and diversifying step for the Estonian startup ecosystem. In addition to the investment, the fund manager will have to raise additional capital from private investors.

“State as a trustworthy cornerstone investor gives reassurance and lowers the entry barrier for private investors. Therefore, we hope to see teams participating at the call who are able to attract private capital,” Pettai adds.