The Hungarian state owns Hiventures Zrt. It is one of the most active and largest venture capitalists in Eastern Europe. These investors finance start-ups or companies with high potential in the start-up phase. Most of them will not be profitable, but whatever it is, its business success will make up for the other losses.
Why will the Hungarian state be an investor?
For many, the question may arise as to why the state is investing in risky startups. Until the mid-2010s, Hungary was one of the last countries in Europe to invest in venture capital. Subsequently, a large number of equity funds were launched, largely with EU funding.
Hiventures is currently investing in 240 companies.
read also: Hungarian company aims to conquer US food market
The company, which started in 2017, has spent less than half of its resources. The European Union wants more and more repayable aid. The goal is that if the funds are well invested, the money from the sale of successful businesses can be reinvested, writes g7.hu. In most of the investments, Hiventures intervened with another equity fund.
Initially, Hiventures only funded startups, but later it turned to domestic companies as well.
You have to wait a long time for the result
Although they operate with taxpayer money, annual accounts and the current value of investments are not disclosed. We also often wonder why they invested in a particular industry and company. Many associate the idea of creating the fund with the eldest daughter of Hungarian Prime Minister Viktor Orbán, Ráhel Orbán.
read also: Hungarian company expanding in Poland: shopping centers, office building acquired – PHOTOS
Overall, the Hiventures companies ended the year on a good note.
The sales of the companies that acquired the investment are increasing. In addition, export sales have also increased, writes napi.hu. At the end of 2020, Hiventures employed 2,856 people. So far, the company has paid 33.8 billion HUF, which means that a new start-up job can cost an average of 11.8 million HUF. It is a very inexpensive way to create jobs. In large companies, it can be 3 to 6 times that amount.
In short, no idea for a revolutionary startup on a global scale has yet received state funding. However, most businesses are in their early stages and growing. The success of the program cannot be judged until the end of the decade.
Source: g7.hu, napi.hu