October and 5 Confidi launch a new €30 M fund dedicated to Italian SMEs under the Juncker Plan

  • The new direct lending fund is the result of cooperation between October, Confidi of Federconfidi-Confindustria and the European Investment Fund (EIF), supported by the Investment Plan for Europe or Juncker Plan.
  • October, associated with Confidi, announces today the first closing of the fund with a focus on supporting Italian SMEs growth.
  • Thanks to the contribution of Confidi and the impact of the guarantee provided by InnovFin, eligible SMEs will benefit from a reduction in the cost of financing.

SMEs lending platform October announces the launch of a €30 million fund dedicated to Italian companies, in collaboration with 5 Confidi entities belonging to Federconfidi and Rete Fidi Italia and with the European Investment Fund (EIF). In the context of the emerging digitalization of finance, this initiative aims to give a strong boost to breakthrough innovation thanks to the contribution of the various players involved.

The first closing of October fund has been subscribed by 5 supervised Confidi entities (Neafidi, Confidi Systema!, Fidimpresa Italia, Confidi Sardegna and Confidi Centro) and new investors are expected to join in the coming months. With its nation-wide presence, the Confidi network aims to promote the development of a financial culture among SMEs enhancing the relationship with both banks and other players available on the market to supplement bank credit, towards a major balance and awareness in financial choices.

The fund will lend alongside October’s existing institutional and retail lenders. It will mostly focus on companies eligible for the InnovFin SME Guarantee Facility, an initiative launched by the European Commission and the EIB Group backed by the EU’s research and innovation program Horizon 2020 programme, for which October has become an approved intermediary.

The InnovFin guarantee agreement signed with October was made possible thanks to the support of the European Fund for Strategic Investments (EFSI), the central pillar of the European Commission’s Investment Plan for Europe, also known as the Juncker Plan. Thanks to Confidi and the impact of the guarantee facility provided by InnovFin, eligible companies will benefit from a reduced cost of funding.

Carlos Moedas, European Commissioner for Research, Science and Innovation, comments: “This new InnovFin agreement will give Italian entrepreneurs an additional financial boost, supporting their efforts in creating jobs, growth and innovate. The Investment Plan for Europe is already expected to provide more than 65,400 Italian small and medium businesses with better access to funding.”

Pier-Luigi Gilibert, Chief Executive of the European Investment Funds, comments: “This operation demonstrates the capacity of the EIF to help finance all kinds of SMEs regardless of their size by supporting innovative finance providers such as October. We are confident this cooperation will further enhance access to finance for those companies which may fall outside of the general scope of traditional lenders.”

Giorgio Guarena, President of Rete Fidi Italia, comments: “This operation is very important for our Federation because it represents the adoption of a systemic approach to innovation in collaboration with and participation of leading public (EIF) and private entities. It delivers various positive values, from financial support to member SMEs, to an effective form of investment for Confidi, in order to be constantly aligned with fintech techniques and instruments”.

Sergio Zocchi, CEO of October Italia, comments: “This project is a perfect example of what cooperation between different actors within the financial ecosystem means. Fintech can be a powerful driver of digital transformation when it creates positive synergies among those who embrace it. October Fund is a great opportunity for SMEs as they will get better funding and for existing October lenders as they will get access to better companies while maintaining their returns.”

About Juncker Plan: The Investment Plan for Europe, the so-called “Juncker Plan”, is one of the European Commission’s top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects. The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The projects and agreements approved for financing under the EFSI so far are expected to mobilize almost EUR 410 billion in investments and support around 952,000 SMEs across all 28 Member States.

About the EIF: The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

About the InnovFin SME Guarantee Facility: The InnovFin SME Guarantee Facility is established under the “EU InnovFin Finance for Innovators” initiative developed under Horizon 2020, the EU Framework Programme for research and Innovation. It provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (fewer than 500 employees). The facility is managed by EIF and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by the EU and EIF against a proportion of their losses incurred on the debt financing covered under the facility.

About Confidi: Confidi are cooperative, non-profit guarantee consortia that support and facilitate access to credit for small and medium-sized Italian companies. In 2018, they associate a total of more than 66,000 small and medium enterprises, representing more than a third of the total number of enterprises associated with Federconfidi. They guarantee over 929 million euro of outstanding stock (equal to 44% of the total stock of outstanding guarantees) and issued guarantees during the year for a total of 428 million euro, with an increase of 5.3% compared to 2017.

About October: October is the new name of Lendix. October is a European SME lending platform, number 1 in continental Europe (source Altfi). In 2018, October is ranked in the KPMG and H2 Ventures Fintech100 for the third consecutive year and is backed amongst others by Partech, CNP Assurances, Matmut, Allianz, Idinvest, C.I.R. Spa and Decaux Frères Investissements. October enables SMEs to borrow directly from individual and institutional lenders without going through banks. Lenders invest their savings usefully and profitably to facilitate the funding of the real economy whilst businesses find new, simple and effective sources of finance independently of banks. October has already financed in excess of €300m for more than 600 SME development projects of all sizes and in all sectors. October operates in France, Spain, Italy, the Netherlands and Germany.