RRF Czechia Fund of Funds

The EIF and the Czechia have launched a new EUR 55m fund-of-funds initiative focused on equity financing for early-stage Czech start-ups and spin-offs developing digital technologies.

The Recovery and Resilience Facility was established by Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021, aiming to mitigate the economic and social impact of the coronavirus pandemic and to make European economies and societies more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. Pursuant to the RRF Regulation, the Council of the European Union approved a recovery and resilience plan for Czechia on 31 August 2021 (“NPO”). More details about the NPO are available at https://www.planobnovycr.cz/.

Under the NPO, Czechia (“CR”) has committed to launch three equity financial instruments under Component 3.4, Investment 9 “Pilot co-investment funds for the development of pre-seed investments, strategic technologies and university spin-offs within the framework of European Centres of Excellence”. In March 2023, Czechia, acting through the Ministry of Industry and Trade, entrusted the EIF with the management of these instruments under the umbrella of the Recovery Equity Fund of Funds, further referred to as the RRF Czechia Fund of Funds or RRFCZ FoF.

The RRFCZ FoF

The RRF Czechia Fund of Funds will invest in three venture capital funds with specialised strategies – a pre-seed co-investment fund, a fintech fund focused on applications of distributed ledger technologies (“DLT”) and benefitting from a new regulatory sandbox, and a technology transfer fund commercialising research from leading Czech universities in the field of artificial intelligence (“AI”). The overarching focus of these funds is on digital technologies, which are viewed as strategically important to Czechia. The planned funds are pilots that may be followed up in the future with additional funding. Altogether, the RRFCZ FoF will support the digital transformation of the national economy and the development of the increasingly lively Czech venture capital market.

All funds will be managed by independent, private investment teams selected by the EIF, using its standard investment process. With the aim of selecting the fund managers under the RRFCZ FoF, the EIF will launch one or more calls for expression of interest, starting with a call for expression of interest for the pre-seed co-investment fund (see below).

The RRFCZ FoF does not invest directly in start-ups – such underlying investments in portfolio companies will be carried out by the selected independent, private investment teams who will also raise additional capital from other investors.