By Niket Nishant
(Reuters) -Alternative credit manager Viola Credit said on Wednesday it is planning to raise up to 300 million euros ($347.3 million) for a debt fund focused on European technology companies, which are looking for capital beyond equity funding.
The fund has drawn commitments from British Business Bank and European Investment Fund, and will provide debt averaging between 10 million euros and 15 million euros per deal.
WHY IT’S IMPORTANT
European tech firms have scaled rapidly over the past decade, but their access to non-dilutive funding, which does not require founders to give up ownership stakes, has lagged far behind their U.S. counterparts.
Funds such as Viola’s aim to boost Europe as it competes globally in high-impact sectors such as artificial intelligence.
Viola has over $4 billion under management in total.
CONTEXT
Europe has struggled to produce the next wave of big tech winners. Almost none of the region’s software companies valued at over one billion euros were founded in the past 15 years, according to a June report from McKinsey and Boardwave.
Viola’s new fund will target financing up to 50 private equity-backed companies in Western Europe and the UK, focusing on sectors such as enterprise software, AI, financial technology, cleantech and healthtech, the company said.
The launch comes weeks after Viola raised $2 billion for a global asset-backed lending fund.
KEY QUOTES
“We see a growing funding gap in Europe. Europe is underpenetrated, but at the same time it is producing more and more unicorns,” said Ido Vigdor, managing partner at Viola Credit.
“Equity is quite expensive for a lot of companies. We see many second-time founders and big companies in Europe more keen on non-dilutive capital for use cases that should be financed by debt,” said Neha Mittal, head of Europe at the company.
($1 = 0.8638 euros)
(Reporting by Niket Nishant in Bengaluru; Editing by Sahal Muhammed)
