October secures €30 million
European platform for SME financing October has secured 30 million euros. The funding comes from the European Investment Fund (EIF) and Dutch Invest-NL. The funding will be used to support European SME’s.
October is a European crowdfunding platform that is specialized in business loans. It was founded in 2015 and has since then funded SME’s in France, Spain, Italy, the Netherlands and Germany with a total amount of 650 million euros.
The investment platform has now secured funding from EIF and Dutch impact investor Invest-NL. The investment is part of the Dutch Alternative Credit Instrument (DACI) initiative, recently launched by the Dutch government, Invest-NL and the EIF. DACI invests in debt funds with the aim of providing access to alternative financing sources for Dutch SMEs, mainly through non-bank lenders. This investment is Invest-NL’s first in the context of the DACI initiative in favor of SMEs.
The 30 million euros will be used for October’s fourth fund, also known as the SME IV-fund. The fund gives institutional investors access to a portfolio of loans to companies in France, Italy, Spain, the Netherlands and Germany. Invest-NL will be providing the fund with 10 million euros, the remaining 20 million euros will come from the EIF.
‘The fund has so far founded 590 projects for a total of €154 million.’
The SME IV-fund has so far funded 590 projects for a total of 154 million euros. The portfolio is quite diversified, with loans from 30.000 to 5 million euros. Investments started around march 2020 and so far, 20 percent is funded by October Netherlands. According to October, the fund has a unique risk-return profile because a significant part of the loans in Italy, France and the Netherlands have a state guarantee of up to 90 percent. With the newest investment, the fund now contains 215 million euros.
‘SME’s need a simple financing process’
Luuc Mannaerts, CEO of October Netherlands: “The investment of these two parties shows confidence in October and our technology. SMEs need a simple financing process and investors are looking for the right channel to lend money. October’s platform brings these two needs together and enriches the financing landscape for European SMEs. As October’s first Dutch institutional investor, Invest-NL sets an example for other large institutions.”
‘The investment of these parties shows confidence in October.’
Alain Godard, chief executive of the EIF, is pleased with Europe’s involvement in the October fund: “European SMEs need to benefit from sources of finance that are both innovative and easily accessible. This is what European fintech October offers, as it has already financed many European SMEs and is one of the most promising investment platforms.”