Capitalia doubles its financing portfolio in 2021 and launches two alternative investment funds
2nd of February, 2022
Last year, Capitalia issued more than 20 million euros of debt financing to more than 200 businesses in the Baltic States. For the third year in a row, more than half of funding was allocated to Latvian companies, while Lithuania and Estonia share the remaining part equally. To increase the attraction of funding for companies in the Baltic states, Capitalia has launched two alternative investment funds and made its first venture capital investments.
"The Covid-19 pandemic will soon reach two years, and those years have been shockingly different. In 2020 many Baltic companies were scared, stagnating, and aiming to just survive. However, in 2021 the majority of businesses were back in full gear, aiming for growth, expansions and acquisitions. Last year, Capitalia concluded many complex structures and non-standard transactions. Such deals include the acquisition of shares and buy-out transactions which are difficult to finance with a traditional bank loan. The brightest of them was the energy efficiency and lighting service provider RCG Lighthouse, SIA. Within the framework of this transaction, the management of the company bought out 49% of shares from the Venture Capital Fund “FlyCap”. Structurally complex and unusual transactions are one of the niches in which Capitalia's financing may be particularly suitable” emphasizes Artūrs Soročenkovs, Capitalia's head of financing projects.
Last year, the largest demand for Capitalia's financing was observed in the trade, agriculture, and manufacturing sectors – these 3 industries’ companies together comprise almost 60% of all loan transactions. The average loan amount of Capitalia continued growing and reached 64 thousand euros, ranging from 5 thousand euros to 824 thousand euros. In 2021, the largest loan was issued to an experienced metal products manufacturing company in Latvia to purchase a production building in Riga.
Capitalia is also successfully continuing its cooperation with the European Investment Fund (hereinafter - the EIF), implementing a loan guarantee program under which the EIF guarantees 80% of the loan principal. Under the EIF guarantee program, a loan of up to EUR 50,000 is more accessible and affordable for small and medium-sized enterprises in the Baltics. 124 companies were financed under EIF EaSI scheme for a total of more than EUR 3 million last year.
New financing solutions
In 2021, Capitalia has developed many new products and services. Last spring, Capitalia began providing leasing financing for the purchase of transport, machinery, and equipment, which was followed by the establishment of Capitalia's alternative investment funds. The first EUR 0.5 million venture debt transaction was also concluded with a fast-growing and promising pet food producer in Lithuania, „Rocketo”. At the end of the year, Capitalia started offering bank financing attraction services to companies that want to receive financing offers from various Latvian commercial banks with the professional help of Capitalia managers and minimal time consumption and effort.
"In recent years Capitalia has successfully transformed from a niche business lender into a comprehensive one-stop financial partner providing investment banking services. We are especially pleased with establishment of two alternative investment funds - Capitalia Co-Investment fund and Capitalia Feeder fund. Capitalia Co-Investment Fund, together with the leading Baltic venture capital funds, will invest in promising Baltic start-ups. Currently, the first 3 investments have already been made for the total amount of 750 thousand euros. Capitalia Feeder-fund, on the other hand, has invested in the well-known venture capital fund Change Ventures II fund.. We are proud that in addition to the opportunity to co-finance loan Cases, we have provided regional investors an opportunity to cost-efficiently participate also in equity investments of the promising pan-Baltic start-ups,” notes Juris Grišins, CEO of Capitalia.
We have funded more than 5000 businesses investing over EUR 100 million in their development. We have also advised more than 100 companies in business valuation, finance attraction, and sales transactions. While for investors we offer a wide range of lending opportunities in businesses, including debt and equity investments as well as financial instruments. Among our clients are smaller companies like TasteCaps and Erenpreiss, as well recognized companies such as Stenders, Aerodium Technologies and Uprent.
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