EMCC European Monitoring Centre on Change

The Growth Fund

Phase: Anticipation
  • Access to finance
  • response to COVID-19
  • Attracting investors
  • Fostering innovation
  • Support of companies' growth
  • Support of SMEs
Zuletzt geändert: 03 November, 2020
Ursprünglicher Name:


Englischer Name:

The Growth Fund


The purpose of the Growth Fund is to promote growth and innovation in small and medium enterprises (SMEs) in all industries as a way to achieve greater socio-economic returns. All SMEs that can present a growth potential are eligible, but in practice it is mostly start-ups or young enterprises that have the attention of the Growth Fund. In Denmark, SMEs are normally characterised by having fewer than 100 employees.

COVID-19 response

To face the COVID-19 crisis, the state introduced two new different schemes in the framework of the Growth Fund, each of them providing an overall available support of DKK 25 billion (€3.36 billion):

  • one relating to the SMEs (companies with fewer than 250 employees and having a turnover of no more than DKK 372 million/year (€50 million) and/or a total annual balance sheet of a maximum of DKK 320 million/year (€43 million) - which means that companies where either revenue or balance sheet do not exceed the limit are an SME); and
  • one relating to the large companies (250 or more employees and/or a revenue of more than DKK 372 million/year (€50 million) and a balance sheet total of more than DKK 320 million/year (€43 million).

Another measure introduced to face the outbreak of the pandemic early 2020 is the COVID-19 Start Loan. It consists of a loan targeted at young businesses that are still in the start-up phase, but whose product is fully developed, scalable and has a high level of innovation that sets it apart from others in the market. In addition, the company should have completed the first sales to customers.

Eligible businesses are only the ones affected by the economic effects of COVID-19, and expect to suffer a revenue loss of at least 30%.

Main characteristics

The Growth Fund is a state investment fund which aims to encourage growth in companies by providing venture capital, loans and guarantees to selected companies that can present a potential for growth and job creation based on a concrete project. The strategy of the fund is implemented in three main focus areas, the fund:

  • invests in funds that subsequently invest the capital in companies. The investments in funds take place in close cooperation with private investors;
  • invests with own capital in start-up companies that present a strong growth potential, but have difficulty in securing sufficient risk capital. The investments are made alongside private investors or other public actors such as the innovation incubators or the Regional Growth Houses;
  • provides loans directly to small and medium-sized companies with reasonable growth plans that cannot provide adequate security or do not have sufficient own capital to get a loan at the bank. In addition, the fund provides guarantees for loans, guarantees and credits of SMEs in financial institutions.

COVID-19 response

With reference to SMEs, the instrument allows the state to provide a guarantee of 80% of new bank loans issued to companies affected by the COVID-19 crisis. The guarantee is funded via the Growth Fund and has a maturity of up to 6 years, which is written down annually on a straight-line basis. The price consists of a foundation commission of DKK 2,500 (€335.80) and an annual commission of 1% of the amount guaranteed.

In relation to large companies based in Denmark, the Growth Fund can guarantee 70% of the loans or credit issued to cover company's losses or expected losses as a consequence of the COVID-19 crisis. The same company can be guaranteed several times - however, the Growth Fund cannot guarantee loans to cover loss of revenue, which relates to the same period more than once. The guarantee has a term of up to 6 years and is written down on a straight-line basis over the term.

Both the above mentioned schemes were valid until 1 October 2020 and have been prolonged (as at October 2020) without an end date, these also apply to Faroese and Greenlandic companies.

The main characteristics of the third instrument implemented to face the COVID-19 crisis, that is to say the COVID-19 Start Loan, are:

  • The loan is on DKK 0.4 - 2 million (€ 0.05 - 0.27 million);
  • There is a requirement for cofinancing from other actors (no specifications about the actors) in a ratio of up to 1:3;
  • The interest rate is based on Cibor 3 + 5%;
  • The duration is up to 6 years;
  • The scheme ran in the first place until 30 September 2020, but has been prolonged without a new fixed end date (as at October 2020). 


  • National funds
  • Other

Involved actors

National government
Private partners, financial institutions.


In the spring of 2019, the fund calculated the activity in supported companies. Together they employed more than 65,500 employees and have a total turnover of more than DKK 107 billion (€ 14.4 billion). In 2018, the Growth Fund made 751 cofinancings.

In 2017, the activities increased compared to the past years. A total of 1,652 companies benefitted from cofinancing, loans and/or guarantees via the fund. Overall DKK 4.9 billion (€653 million) was invested.

In 2015 the fund supported 815 companies for a total amount of DKK 2.2 billion (€0.3 billion) and gained a solid turnover on the yearly account. The companies that since 1992 were cofinanced by the fund had, in 2015, more than 55,000 employees altogether, and a total turnover of DKK 78 billion (€2.4 billion). In the same period, 6,000 companies experienced growth thanks to private investors' cofinancing of the fund.


The Growth Fund is evaluated every three years.

An evaluation of the Growth Fund in 2020 has not yet been carried out - partly because of new measures due to the impact of COVID-19 on Danish companies.

An evaluation has been carried out in 2017. In relation to the assessment of the relevance of the Growth Fund, the Ministry for Business, Industry and Financial Affairs emphasises that financing activity has been increasing during the evaluation period, driven mainly by an increase in demand for growth loans; companies indicate that the capital contribution from the Growth Fund has been decisive for their business.

The evaluation of 2014 concluded that the Growth Fund is 'highly relevant'. It also stated that the Growth Fund, with its indirect investments, contributed to the attraction of private investors and competence building in the Danish venture market, while the fund's loan and guarantee products helped to ensure the access to finance during the crisis.


No significant weaknesses have been reported in the evaluation.


No information available.
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