Gazelle Finance, as part of its expansion strategy targeting Eastern Partnership countries along the eastern border of the European Union, is launching its operations in Ukraine.
USAID's Competitive Economy Program (CEP) and Economic Resilience Activity (ERA) have recently begun supporting Gazelle Finance in this initial effort.
Since 2017, Gazelle Finance, through its first impact investment fund Gazelle Fund I, has invested over $25M in 35 high-growth small and medium enterprises (SMEs) in the Eastern Partnership countries of Georgia and Armenia. With the addition of Ukraine to Gazelle Finance’s next impact investment fund, the Gazelle Finance Eastern Partnership Growth Fund II, the company will expand its SME market by ten-fold.
“USAID has a long and successful track record of supporting the development of capital markets in the region,” said USAID/Ukraine Mission Director James Hope. “We are excited about the launch of Gazelle Finance in Ukraine. It will address a key underserved market segment – the missing middle of SMEs – through an innovative tool with the potential to help a new generation of entrepreneurs to compete and thrive across diverse sectors.”
Since 2018, USAID has had two large-scale economic development programs in Ukraine -- CEP, which operates country-wide, and ERA, which is focused on the government-controlled areas of Donetsk and Luhansk Oblasts in addition to the Sea of Azov region in Zaporizhzhia Oblast. Key objectives of these programs include supporting new markets, improving the competitiveness of SMEs, and increasing the inflow of investments, which includes the development of the private equity and venture capital ecosystem to accelerate foreign direct investment into the country.
“An important objective of ERA is to attract institutional investment capital and know-how transfer to support SMEs in the conflict regions of eastern Ukraine, including Mariupol, Kramatorsk, and Severodonetsk,” said Michael Pillsbury, Chief of Party of USAID ERA. “Most SMEs in these regions lack the necessary collateral to secure bank financing, so Gazelle Finance’s innovative quasi-equity financial instruments, blended with value-add advisory services and know-how transfer, will provide a critical financial instrument alternative that otherwise does not exist in the marketplace today.” — added Volodymyr Cherviakov, ERA Investment Lead.
“The investment potential in Ukraine is largely untapped. With its strategic position on the eastern border of the European Union, a burgeoning IT sector, and other competitive industries, the country is poised for sustained economic growth,” said David Anderson, Chief of Party of USAID CEP. “Gazelle Finance’s entry into Ukraine plays an important role in providing growth capital to SMEs across the supply chains of Ukraine’s high growth sectors, which will generate high-paying jobs, facilitate import substitution, and accelerate hard currency denominated exports.”
