Technology Transfer Fund Financial Instrument to Advance Innovation

Technology Transfer Fund: Financial Instrument to Advance Innovation in Bulgaria Svetoslava Georgieva Executive Director, Fund Manager of Financial Instruments in Bulgaria 16 October 2018 Sofia Tech Park

The Fund of Funds in a nutshell European Structural & Investment Funds National Co-financing Operational Programmes ESIF FUND OF FUNDS PRIVATE INVESTORS FINANCIAL INSTRUMENTS FINAL RECIPIENTS © FMFIB, 2018 FMFIB FINANCIAL INTERMEDIARIES 2

Mobilising public & private resources to achieve policy goals through market-driven solutions ESIF Financial instruments State budget § FIs are important tool towards achieving EU policy objectives Operational Programmes § Combine public with resources & expertise private § Recipients supported via market Fund of funds FMFIB mechanisms § Revolving funds, i. e. public funds are reused for same goals Private investors Financial instruments Final recipients Financial intermediaries § Clear advantages over grants § hence: an increasing portion of EU budget would be channelled to FI Fund of Funds § A strategic decision to implement nation’s FIs via investment vehicle, i. e. the Fo. F § Currently, envisaged Fo. F balance sheet totals EUR 606 mln. § Expected leverage would boost the © FMFIB, 2018 cumulative investments to EUR 1. 4 billion 3

A broad product offering with a strong emphasis on supporting startups and companies geared for growth © FMFIB, 2018 OPIC Seed, Acc. & Start-Up Fund (SASF) EUR 51. 3 M OPIC Mezz Growth Fund EUR 38. 5 M OPIC VC Fund EUR 24. 1 M OPIC Technology Transfer Fund (TTF) EUR 30 M OPIC Portfolio guarantees EUR 70 M OPIC Microloans EUR 7. 6 M OPHRD Microloans EUR 25. 6 M OPHRD Guarantees for microloans EUR 8. 7 M OPRG Urban Development Fund EUR 189 M OPE Waste EUR 26. 6 M OPE Water EUR 119. 6 M 45% STARTUPS SMEs GROWTH 4

FMFIB team balancing private and public sector expertise FMFIB Coordination Unit, 3 FTE Front Office, 12 FTE Middle Office, 9 FTE Select previous employers in financial services Back Office & Legal, 12 FTE § Front Office combines experience in PE funding, corporate finance, investment and commercial banking § in structuring and implementation of financial & policy instruments related to economic and regional development § supported by seasoned teams of risk, legal, compliance, audit, finance, PR and marketing professionals The team features professionals with graduate degrees from INSEAD, Harvard, LSE, Pantheon. Sorbonne University, Pantheon Assas, Paris Dauphine, Salford, Osnabrück, University of Freiburg, Bocconi, University of Mannheim, etc. © FMFIB, 2018 5

Investment Ecosystem Knowledge Experts PROs Labs Companies Fund management Deal Origination Research Labs Tech Parks TTOs © FMFIB, 2018 6

OPIC equity and quasi-equity investment scope OPIC Investment strategy re. equity investments Priority axis I EUR 30 M Priority axis II EUR 115 M § FI scope based on lessons learned & identified market inefficiencies FMFIB € 30 M (max. 90%) € 51. 3 M (max. 90%) € 24. 1 M (max. 70%) € 38. 5 M (max. 70%) Technology Transfer Fund Seed/ Acc. Fund Venture Capital Fund Mezz. / Growth Fund € 33 M € 57 M € 34 M € 55 M SMEs & Large (3 S) Mechatronics Clean. Tech ICT Life Sciences and Bio. Tech SMEs OPIC (quasi) equity investments SMEs § Budget amounts to EUR 150 mln. § IS envisages four types of investment funds across the PE/ VC spectrum Our role § FMFIB structures the products and selects fund managers in an open & transparent procedure § Fo. F would be a limited partner § The vehicles would attract private Generalist capital at fund level and/ or via coinvestments Note: The funding amounts provided are gross amounts including management fees. © FMFIB, 2018 7

Technology Transfer Fund: Policy Rationale Bridge the Commercialise &gap between internationalise science and business R&D Foster innovation Support R&D Collaboration between companies and research organisations re. new or improved processes & products Increase/ establish innovation capacity & resources Commercialisation of R&DI re. new products, processes, & technologies Acquisition, management and commercialization of IP © FMFIB, 2018 8

Technology Transfer Fund: Business Rationale § TTF would provide equity and quasi-equity financing § Fo. F commitment provided to one investment funds may be or more Fund of Funds § TTF investment strategy should € 30 М be aligned with the policy rationale Private investors € 3. 3 М Technology Transfer Fund manager € 33. 3 М Investees Large SME corporates Start-ups Spin-offs § Fo. F max. participation: 90% of fund size § Fund life: 10+1+1 years, incl. investment period of ~5 years § Risk sharing/ distr. cascade: TBD (pari-passu / asymmetric return) © FMFIB, 2018 9

Sector Focus Organic products ICT Nano. Tech Cultural and creative industries Health Mechatronics Bio. Tech Recreational Industries Clean. Tech Pharma © FMFIB, 2018 10

Selected Characteristics of Target Investees Co’s collaborating re. R&D Tech brokers ELIGIBLE INVESTEES UNIVERSE Innovative/ tech Co’s Knowledge based Co’s R&D related spin-offs Co’s conducting R&D 11 © FMFIB, 2018

Selected Features of Eligible Investments EU-based projects, but benefits retained in BG Projects “in progress” Project costs up to € 5 M Arms-length IP transfers only 12 © FMFIB, 2018

Coordination Unit: Angelina Todorova, MA Oxon, MIC Head if Unit Tel. : +359 2 905 52 36 a. todorova@fmfib. bg Dochka Vassileva, Ph. D Senior Expert “Strategic Investments” Tel. : +359 2 905 52 39 d. vassileva@fmfib. bg Petar Mihaylov Senior Expert “Investments in SME Sector” Tel. : +359 2 905 52 38 p. mihaylov@fmfib. bg © FMFIB, 2018 Contact details: Fund Manager of Financial Instruments in Bulgaria 1606 Sofia, Bulgaria 30 -32 Totleben Blvd office@fmfib. bg www. fmfib. bg