The European Investment Bank (EIB) has signed a €25 million quasi-equity financing agreement with podcast company Acast. As well as independent podcasts, Acast also looks after the audio content of larger publishers, such as the Financial Times, the Guardian, Vogue, Aftonbladet and Billboard. The EIB financing is supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe, or Juncker Plan.
Acast will use the financing to expand its research and development activities and to further develop its audio content distribution platform. The company is headquartered in Sweden and its services are available in 10 countries. A part of the project costs will go into supporting its international market expansion. The peculiarity of the ‘quasi equity’ financing, which the EIB is only able to support with the backing of the Juncker Plan, is that it has the characteristics of an equity stake in the company, yet does not translate into the EIB owning shares in Acast. This type of financing addresses a market failure for non-dilutive growth capital for European businesses: providing equity without affecting the ownership of the company.
European Commission Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “The main motivation for creating the Juncker Plan was to provide alternative sources of financing to innovative companies in need of financial support that struggled to obtain a traditional bank loan, and as a result to boost jobs, growth and investment in the EU. Today’s agreement between the EIB and Acast does exactly that, and it does so using a novel form of financing. I wish the company every success with its expansion plans.”
“The EIB’s investment and support of Acast is a true milestone in our company’s growth as well as in the future of the global podcasting infrastructure. Today, we are one step closer to our goal of seeking out and supporting all the audio storytellers of the world – giving their stories the audience they deserve,” said Leandro Saucedo, Chief Business Officer of Acast.
EIB Vice-President Alexander Stubb, added: “Everyone loves a good podcast, but it can be hard to make a living off of this type of infotainment. I think it’s important that a European provider for this type of service exists, which gives all voices the possibility to be heard. Acast truly serves as a one-stop-shop for listeners, creators and advertisers, and we’re happy to support the company in its expansion.”
The European Investment Bank (EIB) is the European Union’s bank; the only bank owned by and representing the interests of the European Union Member States. It works closely with other EU institutions to implement EU policy and is the world’s largest multilateral borrower and lender. The EIB provides finance and expertise for sustainable investment projects that contribute to EU policy objectives. More than 90% of its activity is in Europe.In 2018 alone, the Bank made available a record EUR 1.37 bln in loans for Swedish projects in various sectors, including research & development, industry, nearly-zero-energy-buildings and telecommunications.
Acast is the world’s largest podcast company. Since 2014, Acast has been the engine powering audio for creators all over the world. At its core, Acast connects audio makers with the financial support they need to create amazing content while also delivering the audience they want. Acast works with podcasts globally including Alice & Bianca – har du sagt A får du säga B, My Dad Wrote a Porno, David Tennant Does a Podcast With…, Värvet, Wahlgren & Wistam as well as those of publishers such as the BBC, Vogue, The Economist, and VICE. As a global business, Acast has offices around the world from Stockholm to Sydney and a team of 150+ talented audio lovers working diligently to create a sustainable audio and voice ecosystem to ensure that the audio industry continues to grow and flourish. Acast was founded by Karl Rosander and Mans Ulvestam together with co-founder Johan Billgren.
This agreement has been made possible thanks to the support of the European Fund for Strategic Investments (EFSI). The EFSI is the pillar of the Investment Plan for Europe, known as the Juncker Plan. Its support increases the EIB Group’s capacity to finance investment projects that, in line with the Juncker Plan’s criteria, fosters the EU competitiveness and create new jobs. The Juncker Plan focuses on boosting investment to generate jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.
The EFSI provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. The projects and agreements approved for financing under EFSI are currently expected to mobilise €424 billion in investments. The Plan is currently supporting 967,000 SMEs in the 28 Member States. More information on the results of the Investment Plan for Europe is available here.