US private-equity firm Horizon Capital, which invests in high growth and export-driven companies in Ukraine and the near region, has closed its third fund, Emerging Europe Growth Fund III (EEGF III), at its 200 million US dollar hard cap, far surpassing the 150 million US dollar target. In what marks the largest private equity fund raised for Ukraine in a decade, Horizon’s EEGF III received strong backing from existing and new investors, attracted by the excellent value, fast growth and abundance of opportunities that Ukraine offers. Horizon manages over 850 million US dollars in assets from investors with a capital base exceeding 350 billion US dollars. Its Ukraine-focused funds have invested over 650 million US dollars in 140 companies employing over 46,000 people.
“Our fundraising success should send a strong signal that Ukraine offers tremendous rewards for those willing to look past the headlines,” said Lenna Koszarny, Horizon Capital’s founding partner and CEO. “This fund is a testament to our long-term, valued investor relationships, our strong team of talented professionals and export-focused investment strategy, and our solid track record of successful investing in this country. Since our first close last year, the new fund has already made six compelling investments and will close many more exciting deals in the years to come.”
EEGF III was launched with an anchor commitment from Western NIS Enterprise Fund and attracted investments from the European Bank for Reconstruction and Development (EBRD), the Dutch Development Bank (FMO), the International Finance Corporation (IFC), PROPARCO, the German Investment Corporation (DEG) and the Investment Fund for Developing Countries (IFU) with over one-third of capital raised from institutional investors, foundations, family offices and other private investors. The new fund enjoys strong backing from existing investors of Horizon Capital’s prior funds, who contributed over 55 per cent of total commitments. US and Europe-based investors contributed roughly 35 per cent each of total capital raised, with the remainder from other international investors.
EEGF III’s investment strategy is focused on fast-growing, export-oriented companies that leverage Ukraine’s cost competitive platform to generate global revenues primarily in IT, light manufacturing, food and agriculture. The Fund will also pursue investments in select, high-growth domestic market segments, including e-commerce, healthcare and pharma, consumer goods and financial services. Investments will range from $5-20 million and be made over the next two-three years.
EEGF III has made six investments to date, five in the core sectors driving Ukraine’s export boom and best-positioned to access global markets, including IT, light manufacturing and food and agro. The Fund has backed Genesis, a global IT product company; Intellias, a fast-growing large IT services company; Yarych, a leading biscuits producer; MAIB, the leading bank in Moldova, and others.
Horizon’s latest fund builds on the success of its previous funds raised for Ukraine and the near region: the 370 million-US dollar EEGF II launched in 2008 and the 132 million-US dollar EEGF I launched in 2006, both providing buyout/expansion capital for domestic-focused businesses. EEGF III is the first Horizon Capital growth equity fund focused primarily on IT and export-oriented companies in their market.