London, United Kingdom, September 26, 2022—To support Ukraine's economic resilience amid the war, IFC is investing $30 million in the Horizon Capital Growth Fund IV (HCGF IV) managed by Horizon Capital, a leading private equity firm in emerging European markets. The investment will support tech and export-oriented entrepreneurs in the information technology (IT) services, e-commerce, innovative consumer goods, and financial technology sectors, creating jobs and accelerating the growth of Ukraine's private equity market.
Ukraine's IT industry remains a bright spot in an economy that has shed nearly 5 million jobs since February 2022 due to the war. But while the sector posted a record $2 billion in revenue in the first quarter of 2022, financing has all but dried up and mergers and acquisitions activity has come to a standstill. IFC's investment in HCGF IV will help support Ukraine's capital markets and the tech and private equity ecosystems.
"This investment is a testament to a new generation of visionary entrepreneurs in Ukraine leading high-potential businesses that will help Ukraine's economy enhance its resilience," said Makhtar Diop, IFC's Managing Director. "Together with partners, we aim to inject much-needed capital into Ukraine's IT sector, bolstering innovation, creating jobs, and encouraging investors to return to the market despite the ongoing war."
With the commitment of IFC and its partners in this transaction, HCGF IV has achieved a first closing of $125 million, exceeding its $100 million initial goal, and reaching 50 percent of HCGF IV's target size, with fundraising to continue over the next year. IFC's partners in the transaction are the European Bank for Reconstruction and Development, Deutsche Investitions- und Entwicklungsgesellschaft, the Swiss Investment Fund for Emerging Markets, the Dutch Entrepreneurial Development Bank, the Western NIS Enterprise Fund, and the Zero Gap Fund, an impact investing collaboration between The Rockefeller Foundation and the John D. and Catherine T. MacArthur Foundation.
While IFC has continued to provide working capital to its existing clients, the partnership with Horizon Capital is IFC's first new investment in Ukraine since Russia's invasion in February. In addition to Ukraine, the Fund will provide growth capital to technology and export-oriented medium-sized companies in neighboring Moldova, which has also suffered from the war. IFC is currently expanding its response to the regional and global impacts of the war, including further financing to support Ukraine and its neighbors, as well as to bolster global food security.
Lenna Koszarny, Horizon Capital's Founding Partner and CEO, said: "We thank IFC and all first close investors for taking this bold step alongside our team of dedicated professionals, ensuring that innovative entrepreneurs from Ukraine and Moldova have access to capital to fuel growth, to contribute to the renewal and revitalization of their countries, to create well-paying jobs, pay taxes, be socially responsible, and provide a strong signal to others that the time to invest is now. We are confident that this historic fund will be a resounding success, delivering both returns and impact."
Horizon Capital has been IFC's strategic partner over the past 14 years, starting from in 2008 through an investment in its Emerging Europe Growth Fund II. That was followed by an investment in Emerging Europe Growth Fund III in 2017 that expanded access to finance for Ukrainian small and medium enterprises in information technology, light manufacturing, and agribusiness.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About Horizon Capital
Horizon Capital is the leading private equity firm in Ukraine, backed by over 40 institutional investors with over $1.2 billion under management in six funds. Horizon Capital is a value-added investor, backing visionary entrepreneurs leading transformational businesses in Ukraine and the near region. For more information, visit www.horizoncapital.com.ua
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