[Newsflash n. 72]

CDP Venture Capital SGR has set up a new “Fondo Rilancio”, which will invest the 200 M€ allocated by the Decreto Rilancio in Startups and Innovative SMEs.

CDP Venture Capital SGR set up a fund (the “Fondo Rilancio” – “Fund”), in charge of allocating 200 million euros, allotted by the Ministry of Economic Development, to support startups and innovative small-medium-sized enterprises in Italy with the goal of allowing a restart during the health emergency caused by the Covid-19 virus.

These resources are allocated in accordance with the provisions of Article 38 of Decree Law no. 34/2020 (“Decreto Rilancio” or “Relaunch Decree”). Among the measures contained in the Relaunch Decree aimed at supporting venture capital, an additional amount of €200 million has been destined to the venture capital fund for the year 2020. In particular, these resources are “aimed at supporting investments in the share-capital, including through the subscription of equity financial instruments, as well as the provision of soft loans, the subscription of convertible bonds, or other debt financial instruments that provide for the possibility of repayment of the contribution made, for the exclusive benefit of innovative start-ups […] and innovative SMEs […]”. The Fund shall coinvest with other investors (private capital).

The Decree has entrusted the Minister of Economic Development with the task of identifying, through a ministerial decree, the procedures for implementing the envisaged benefits “including the co-investment relationship between the above referred resources and the resources of regulated or qualified investors”.
The implementing deicree, published on 19 November 2020 (“Decreto Attuativo” or “Implementing Decree”), states that “The value of individual investments carried out by the Fund may not exceed a maximum of four times the investment made by regulated investors and/or qualified investors”(Art. 4,2), with an overall limit of one million euros for each startup or SME financed.
At the end of the investment period, the Fund’s assets must be invested 70% in companies in which qualified investors have co-invested, and 30% in portfolio companies where the coinvestors are regulated investors.
The Decreto Attuativo provides that initial investments in the target companies are made through convertible loans, or bond type loans with distribution of new shares, and that subsequent investments are made through equity investments.

In any case, the Fund will independently select its targets among those that have been selected  by qualified and regulated investors. To this end, the latter shall indicate the startups and innovative SMEs in which they intend to invest or have invested in the last 6 months preceding the Decreto Rilancio. The target companies must have their registered office, carry out the activity and future development programmes in Italy and comply with the requirements set out in Decreto Attuativo.
Among those selected, during the first six months, priority is granted to those companies meeting the following conditions: the successful conclusion of the application procedure for the admission to Invitalia’s Smart&Start benefits (only for innovative startups) and a decrease in revenues in the first quarter of 2020 of at least 30% compared to the same quarter, or the following, of the previous year (both for SMEs and innovative startups).

These new resources reflects the confidence that the Italian Ministry of Economic Development places in all operators working with the goal of making the venture capital an ecosystem for growth and development of the Italian business culture.  In addition, the approach taken by the government shows the belief that the revamping of innovation in Italy cannot be achieved without being able to count on a solid network of qualified and regulated investors, which are in the position to help start-ups and innovative SMEs in their development path.

For any further clarification and/or for assistance on the topic of this Newsflash, please contact your reference contact in Legália.


Contacts:

Vito Vittore
Partner

Massimiliano Silvetti
Partner

Elena Pagnoni
Partner

Tommaso Ceschia
Associate