Kyiv, Ukraine, April 28, 2023—To support Ukraine's economic recovery and encourage investors amid a massive humanitarian and financial crisis, IFC is investing an additional $30 million in Horizon Capital Growth Fund IV (HCGF IV) managed by Horizon Capital, the leading private equity firm in Ukraine and Moldova. The partnership, building on IFC's initial contribution of $30 million in September 2022, aims to support the tech industry and accelerate the growth of private equity markets in Ukraine and Moldova.
IFC's total commitment of $60 million—the largest investment to date — intends to support the Fund to reach its target size of $250 million promptly and begin investing in businesses in critical need of growth capital.
"The injection of new funding from our longtime partners such as IFC will help us bridge the large funding gap in the private equity market in Ukraine, help mid-sized companies expand, and retain local talent," said Lenna Koszarny, Horizon Capital's Co-Founder and CEO. "We encourage other investors to follow IFC's lead and look past the headlines. Investing where others may be reluctant to enter right now may lead to huge investment opportunities with high return potential."
According to the IT Ukraine association, the tech industry remains the only export industry in Ukraine that operates at its full capacity amid Russia's invasion of Ukraine. In 2022, Ukraine's export of IT services grew by 6 percent from a year earlier, bringing in more than $7.3 billion in revenue while supporting the nation's economy with jobs and regular foreign currency earnings. However, the ongoing insecurity and potential long-term instability are major deterrents that can significantly impact ongoing service delivery. In response, improved access to finance can help businesses adjust to new circumstances and continue to expand.
IFC's new investment is part of its $2 billion Economic Resilience Action (ERA) Program. Announced in December 2022, the response package aims to address the immediate needs of Ukraine's private sector while ensuring access to critical goods and services.
"Ukraine's private sector is a lifeline for its economy, providing jobs, goods, and services. So, it is essential to attract new investors. This will boost private sector resilience as well as support private equity as an alternative source of financing, especially for fast growing businesses that need capital to fund expansion," said Rana Karadsheh, IFC's Regional Director for Europe. She added, "If we invest in these companies now, we are setting a stage for even stronger growth and returns in the years to come. "
IFC's initial commitment helped Horizon Capital achieve its first close at $125 million - 50 percent of HCGF IV's target size - despite a challenging fundraising environment. IFC's increased contribution aims to help the Fund unlock additional commitments, mobilize more private capital, and achieve its hard-cap of $300 million.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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For more information about Horizon Capital, visit
https://horizoncapital.com.ua/
