One of the most experienced venture capital fund managers in the Baltic States, ZGI Capital, has attracted private investments of 10 million EUR to the newly founded capital growth fund ZGI-4. At present, it is the largest private investment raising in Latvia for a state co-financed capital growth fund. The largest amount, or 7.5 million EUR, was invested in the ZGI-4 fund by Swedbank Ieguldījumu Pārvaldes Sabiedrība AS, which will increase its contribution to 11 million EUR as other investors are involved. It is planned that the new fund will invest both in the traditional industries of the Baltic States, and in the so-called new sectors of the economy, such as fintech companies.
ZGI Capital received the LVCA's award Exit of the Year for sale of company Art Fairs Service. Successfully implemented strategy allowed to achieve the goals and resulted in a fruitful exit.
Tradition of the “Investor of the Year” award was introduced in 2015 as a result of the cooperation of the Latvian Private Equity and Venture Capital Association (LVCA) and the Latvian Business Angel Network (LatBAN). The goal of the initiative implemented by LVCA and LatBAN is promotion of the investment sector development in Latvia by expanding the network of investors. Through identification and popularisation of the most successful investments of the year, the organisers would like to draw attention to the significance of the comparatively new sector in Latvia in supporting the viable projects.
— TechChill (@TechChill) November 22, 2017
On 16 November 2017 a contract was signed for the creation of a new venture capital fund “ZGI-4”, which will be managed by venture capital fund manager “ZGI Capital”. Currently, the fund is engaged in attracting private funding to start working on the first fund investments in summer of 2018.
Venture capital is a long-term equity investment in companies with high growth potential, boosting their value growth, growth speed and expansion
Venture capital investments can be made as investments in a company’s equity capital or quasi-capital
Venture capital provides opportunities for companies with high growth potential and innovative enterprises which do not receive investments from traditional financiers due to high risk
The volume of investments can reach EUR 3.75 million in one enterprise
The investment period – up to 5 years
The investor becomes a business partner, sharing the risks and the income of the company, and who provides the company with his experience, knowledge, access to a range of contacts and experts, with an intention of enhancing the company’s turnover, profitability and value
Venture capital investments are made to increase a company’s value by funding its growth and development
Venture capital fund ZGI-3, which is managed ZGI Capital, has sold its 28% stake in the exhibition services company Art Fairs Service.
The company was registered in the spring of 2014, and turned to the investment fund seeking financing necessary for buying equipment. The company has successfully found a niche for itself thanks to innovative technical solutions and original logistical and workflow organization procedures. It enabled the Latvian company to compete with similar companies abroad, which had been in the business for years. It proves that, even in such a seemingly traditional business as organization of and providing equipment for exhibitions, innovative approach can lead to success.
The company has been steadily expanding into new markets. In 2016, Art Fairs Services organized exhibitions in Belgium, Sweden, Netherlands, Germany, Italy, Great Britain, Denmark, Spain and Latvia. Exports account for 99% of the company’s turnover. Art Fairs Service is planning further growth on European markets and also expand into Middle East by employing new business models.
Art Fairs Service earned high marks in the Investment and Development Agency of Latvia’s Export and Innovation Award competition 2016, category Best Exporter, and in the Latvian Export Product 2014 competition organized by the Export Council of Latvia.
The Minister for Economics Arvils Ašeradens addressed the winners of “Investor of the Year ‘16” and investment professionals and emphasised: “Today we are honouring projects with the highest possible added value. Modern and innovative economics cannot exist without the smart or venture capital. Healthy development of the eco-system of innovations, in turn, cannot exist without investments of business angels. Funding of venture capital or smart investments provides the entrepreneurs an opportunity to receive not only additional investments, but also support from experienced experts for the implementation of their ideas. Meanwhile, business angels are like messengers of approaching spring. Intuition, knowledge and courage of business angels raise the potential of the national exports, which is the safest development for the national economy.”
“The year 2016 was a productive year in the sector of private and risk capital. The members of the LVCA have made over 50 investments, providing financial support in the amount of more than 15 million euros to companies operating in different industries. I would like to stress that the contribution of other professional participants of the market, lawyers and financial specialists, is also of importance. This is a joint action resulting in the growth and development of the Latvian investment environment. All the winners of the “Investor of the Year ‘16” award in the sector of legal entities are visionaries of our industry whose working results and contribution we can assess with the mark of the top quality,” said Edgars Pīgoznis, Chairman of the Board of the LVCA.
The Schaeffler Group has acquired Latvian company “SIA Naco Technologies” in Riga. Naco Technologies has unique expertise in the development of new coating systems. Schaeffler is the market leader in functional surface technology in several market segments. Acquiring this highly innovative service provider will help strengthen Schaeffler’s core expertise in this technology of the future.
The start-up company “SIA Naco Technologies” was founded in Latvia’s capital in 2010 with the support of “Commercialization Reactor Riga”, an agency and marketing platform for science-based young businesses. As just one example, the specialists from Latvia have developed what is currently the fastest process for physical vapor deposition (PVD). This technology will complement and further optimize Schaeffler’s high-tech vacuum facilities for PVD and plasma-based PACVD processes that are used in high-volume production. Naco currently has six employees.
Prof. Peter Gutzmer, Deputy CEO and CTO, regards this acquisition as a strategic addition to one of Schaeffler’s key competencies.
“It underlines our claim to technology leadership in coating technology. Our experts are especially important in ensuring the implementation of value adding steps that are essential for quality, functions and costs for important products and components. By acquiring Naco, we have secured the experience and expertise of a scientist highly renowned in the scientific community, five highly-trained specialists and an innovative prototype PVD facility.”
In addition to product and technology expertise, Schaeffler thus also expands its industrialization and value added competencies in surface technology, securing the entire knowledge about this key technology in-house.
For Dr. Yashar Musayev, Senior Vice President of the Competence Center Surface Technology, his new colleagues in Riga are an ideal addition in this field:
“Naco Technologies has been instrumental in promoting the development for particularly environmentally friendly and innovative PVD processes. With Professor Valery Mitin, the company has an internationally renowned expert at its helm. Going forward, we will be able to benefit exclusively from his experience and his team.”
Prof. Mitin is the co-founder of this young company and has more than 40 years’ experience in research, development and production in the nano industry from his work at the “Moscow High Technology Science Research Institute of Non-organic Materials”. He was the world’s first designer of a PVD system. Seventy-one-year-old Prof. Mitin is looking forward to working with the specialists at Schaeffler:
“I would like to contribute my knowledge and the results of our work at one of the most innovative and leading global companies for surface technology. Together we will be able to advance the development of new and even better coating systems and achieve a quantum leap for production methods.”
Schaeffler carries out coating at over 20 locations around the world in more than 50 modern coating machines using a range of methods and technologies, such as spraying and painting procedures as well as chemical and physical processes such as PVD/PACVD. Several million parts with added value through coating technology were delivered from the plants of the Schaeffler Group last year.
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The Schaeffler Group is a leading global integrated automotive and industrial supplier. The company stands for the highest quality, outstanding technology, and strong innovative ability. The Schaeffler Group makes a key contribution to “mobility for tomorrow” with high-precision components and systems in engine, transmission, and chassis applications as well as rolling and plain bearing solutions for a large number of industrial applications. The company generated sales of approximately 12.1 billion euros in 2014. With more than 82,000 employees, Schaeffler is one of the world’s largest technology companies in family ownership and, with approximately 170 locations in 50 countries, has a worldwide network of manufacturing locations, research and development facilities, and sales companies.