Hiventures: A Patient Equity Financing Partner for the Hungarian Startup and SME Sector Even in a Crisis

BUDAPEST, Hungary, June 2, 2020 /PRNewswire/ -- The outbreak of the global coronavirus pandemic is having an economic impact on the SME, large corporate sector and startups. The crisis is having a particularly adverse effect on specific sectors, and most businesses lack sufficient reserves to maintain their operation in the face of falling revenues. The Hungarian Development Bank Group and Hiventures detected in time that these enterprises require immediate state support to overcome their liquidity.

The fundamental investment principles haven't changed; Hiventures still seeks a remedy for market failures. Existing startup and SME equity programmes continue, meaning that startups or already operating businesses that are not directly affected by the crisis still have the chance to apply for the programmes.

However Hiventures is now able to offer a rapidly accessible rescue programme for startups and SMEs hit by the crisis. Under the startup rescue programme with a funding capacity of HUF 30 billion, innovative businesses are financed in the form of a capital and membership loan up to HUF 150 million per transaction, in exchange for a 1% ownership share. A buyback option exists at an annual return of 5.1%, which Hiventures recommends to founders and target companies, since Hiventures aims to preserve the Hungarian ownership of businesses. Under the SME rescue programme, a funding capacity of HUF 41 million is available, and businesses can apply for HUF 50–250 million per transaction. The closed, 10-year duration scheme is also applied in exchange for a 1% ownership share in the form of a capital and membership loan, and the ownership can be repurchased at an annual return of 5.1%, while a mandatory buyback option opens for owners from the 7th year on.

Beyond the rescue programmes, Hiventures launches its Crisis capital fund I with a funding capacity of HUF 150 billion, offering support to more capital-intensive companies hit by the crisis in acquiring companies and properties, as well as in implementing developments. The new capital programme focuses on three key areas: restructuring focus, transaction focus and economic development focus.

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