AlpGIP has completed three investments and is currently reviewing 40 more. The first macro-regional fund supporting innovative SMEs from Northern Italy has welcomed today yet another region: Liguria
The Alpine Growth Investment Platform (AlpGIP) is the first macro-regional fund targeting innovative SMEs together with Venture Capital. It was co-funded by the European Investment Fund (EIF). And today it has been joined by yet another Italian region: Liguria, with Filse, the regional financial institution.
The Alpine Growth Investment Platform (AlpGIP) was created at the end of September through an agreement between the regions of Lombardy, Piedmont and Valle d’Aosta, the Province of Bolzano and EIF. Its objective is that of supporting innovation in the extended Alpine area and, in particular, to help SMEs with high potential for growth find investors and facilitate their access to funding outside banks.
AlpGIP is an experiment, the first of its kind in Italy, and is inspired by existing enterprises in Germany and Poland. It’s a pioneering initiative from many points of view: first of all, because it bears witness to an interest in start-ups by investors who have been so far unrelated to this market.
The fund, created by Luca Del Gobbo, regional councillor for University, Research and Open Innovation, has a total capacity of 100 million Euros, has closed two investments in 2017 (ALTOCAPITAL IV and ARCADIA small cap fund 2) and one in 2018 (Gradiente). These are PE funds, all focused on small caps and Northern Italy, in line with AlpGIP’s strategy. AlpGIP is currently working on the due diligence of 40 other proposals. It aims at closing the investment activity between the end of 2019 and the beginning of 2020.
Its second distinctive feature is that its member regions have started a partnership with the European Investment Fund, which had previously operated only with national players. EIF will not only be managing the platform, but will also invest a significant share of 20.6 million Euros, in addition to the 27.5 million Euros from the Regions (15 from Lombardy, the rest from Piedmont, Valle d’Aosta and the province of Bolzano). Therefore, the fund’s provision amounts to 48 million Euros, but its local impact will be at least of 100 million, thanks to the participation of AlpGIP in venture capital and private equity funds for a maximum quota of 50%. This means that AlpGIP will be able to invest in innovative companies both directly and through venture capital funds. VC funds will have to be accredited by EIF and AlpGIP will also be able to take part in fundraising operations by international funds. For example, if a US fund decides to invest in start-ups in the Alpine area, AlpGIP will be able to participate in that single project. Hence, as well as contributing to the enhancement of local VC, AlpGIP will help attract international investors.
Moreover, through private funds, start-ups will be able to directly contact AlpGIP to obtain financing. Which is not a trivial detail, since it leads to the third distinctive feature of the AlpGIP fund within the landscape of public institutions funding new businesses. That is, operations will take place at market conditions. What does this mean? Typically, all public funding, including regional calls, is financed by ERDF (European Regional Development Fund), and follows a long administrative-bureaucratic route, starting from the presentation of the project, through different levels of control, to a series of authorizations and many other steps requiring time. In the case of AlpGIP, on the contrary, EIF and the involved VC funds can select the best businesses without incurring in any of these restrictions, thus contributing to the development of praiseworthy companies.
AlpGIP is a slender tool, one that meets the needs of start-ups, one that acts like a real VC. It steps in during the so-called “late stage” of a start-up development, when the company needs to grow in size. In Italy, this is usually the phase in which public funds have so far been more absent. This new multi-regional fund aims at filling a gap, and together with VC funds, it helps new companies become great and innovation spread more and more widely.