European SME lending platform October secures €35m

By Gloria Methri

French SME lending platform October has secured €35 million in funding from the European Investment Fund (EIF) and Dutch impact investor Invest-NL. The investment was part of its most recent debt fund ‘SME V’ with the aim to grant more than 3000 loans to European small businesses.

October is targeting a total of €400 million in lending over the next two years, offering investors a diverse portfolio across several EU countries including France, Spain, Italy, Germany, and the Netherlands.

Invest-NL is investing €15 million in the October SME V while EIF is committing €20 million via the InvestEU program. The investment brings the total SME V fund to €100m following its launch in September 2022. The successful closing follows on from the EIF’s investments in previous funds in October fund SME II, III, and IV.

“This renewed commitment for October testifies not only to the track record of this fund manager but also to the goals that the EIF shares with its clients,” said Marjut Falkstedt, Chief Executive of the European Investment Fund.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said, “InvestEU is playing an important role across Europe in SMEs gaining access to the finance they need to innovate, expand and create jobs. Thanks to this agreement, many more businesses will receive the support they need to take their next steps and fulfill their full potential.”

October CEO Patrick de Nonneville added, “With this investment, the EIF continues to support European SMEs via the October platform. Key to this new fund is our data-driven ESG X-Ray module, to integrate ESG criteria in our investment process without burdening SMEs with additional paperwork.”

Loan amounts will range from €10000 to €2 million, with an expected average size of €130000. The fund has a unique risk/return profile, addressing borrowers at the lower end of the market while offering attractive returns to investors. With a short duration, monthly distributions, and monthly reviewed pricing, all measures are taken to protect investors and their returns against inflation.