BackingMinds Invest III will finance early-stage companies primarily in Sweden and across the Nordic region, aiming to find entrepreneurial talent beyond established venture capital networks. It will seek out businesses founded by women as well as by people with immigrant backgrounds and based outside capital cities.

The focus will also be on commercially promising companies that address environmental or social challenges ranging from reducing carbon emissions and upgrading energy efficiency to improving healthcare and bolstering education.

“Europe cannot afford to leave talented entrepreneurs undiscovered simply because they are outside the traditional venture capital networks,” said EIF Deputy Chief Executive Merete Clausen. “BackingMinds has shown that promising businesses can be found in places and among founders that investors too often miss. By supporting this fund, we are helping to unlock that potential and bring more capital to companies tackling some of Europe’s most pressing challenges.”

The EIF, which is part of the Luxembourg-based European Investment Bank (EIB) Group, is the first institutional investor in BackingMinds Invest III. The EIF support is projected to help BackingMinds Invest III attract other institutional investors.

Through its two earlier funds, BackingMinds has invested in 23 companies. Of these, 46% have had at least one female founder, 43% have had founders with immigrant backgrounds and 71% were established outside a capital city.

“The future is never where you expect it, and neither are the founders building it,” said BackingMinds Founding Partner Sara Wimmercranz. “Some of the most innovative companies in the Nordics are being built where venture capital rarely reaches. A network is a filter. It lets through what already looks like the network and repeats the patterns of the past. As investors, we need to be more open and seek founders out. The EIF’s commitment lets us do that on a larger scale.”

The EIF operation is backed by the European Union’s InvestEU programme under a “Social Impact Equity” component that supports investment funds financing businesses that combine commercial ambitions with a positive social or environmental impact.