Atempo Growth Fund II Boosts European Venture Debt

The European venture debt landscape is experiencing a significant expansion, with Atempo Growth emerging as a pivotal player. The firm has announced a substantial third closing for its second growth debt vehicle, Fund II, pushing its committed capital to an impressive €455 million. This achievement brings the platform's total assets under management (AUM) to €850 million, firmly establishing its position among the continent's leading independent providers of flexible growth financing for technology companies.

With a final target of €500 million for Fund II, the firm is now within striking distance of its goal, anticipating a full close by the end of the third quarter of 2026. This latest capital injection includes approximately €100 million earmarked for directly managed co-investments, providing an operational capacity ranging from €450 million to €460 million. This scale empowers Atempo Growth to structure substantial transactions, from €2-3 million up to €50-60 million, often in collaboration with institutional partners.

A key highlight of this closing is the strategic entry of CDP Venture Capital, which committed €15 million through its fund of funds. This investment underscores growing institutional confidence in the venture debt model and its relevance to the Italian innovation ecosystem. Other prominent limited partners include global financial institutions such as Banco Santander, which also holds a minority stake in the management company, alongside Decalia, British Business Investments, and the European Investment Fund. The diverse investor base further includes a significant Italian banking group and a leading European insurance group, reflecting a robust blend of private and institutional capital backing.

Atempo Growth's distinctive 'smart debt' model bridges the gap between traditional bank lending and venture capital equity. It targets rapidly scaling technology and tech-enabled enterprises that, while often pre-profitability with negative EBITDA and cash flow, demonstrate a clear trajectory for value creation. The firm's founders, Luca Colciago and Matteo Avramov Giulivi, emphasize a rigorous due diligence process that extends beyond financial statements, focusing on a company's 18-month growth potential and its ability to attract subsequent capital rounds. This approach yields a compelling risk/return profile, with historical average losses on venture debt typically around 3% of the invested amount, even in severe downturns like 2001, where losses peaked at 6%. The target for each deal is a multiple between 1.4x and 1.5x, aiming for a net IRR exceeding 10% for investors.

The firm's inaugural Fund I, launched in 2022, already boasts a Distribution to Paid-in Capital (DPI) ratio of 43%, projected to reach approximately 50% soon. This rapid capital return is central to their strategy, positioning venture debt as an IRR-focused asset class offering lower volatility and earlier returns compared to pure equity investments. Typical structures involve 12 months of pre-amortization followed by three years of amortization, with security interests often extending to intellectual property. With a team of around 20 professionals, Atempo Growth is well-positioned to manage its current AUM, with plans for further team expansion as it eyes a potential Fund III with an optimal size between €600 million and €800 million.

The market opportunity for venture debt in Europe remains vast. While debt constitutes 10-20% of capital invested in tech in the US and around 5% in the UK, it represents a significantly smaller fraction across the rest of Europe. Industry estimates suggest an annual European demand of €7 billion for growth debt, starkly contrasting with a supply of less than €1 billion. This substantial imbalance underscores the critical role firms like Atempo Growth play in fueling the continent's innovation economy. In Italy, where the firm has already backed companies like MotorK, the platform continues to seek new opportunities, navigating a landscape characterized by smaller domestic funds and regulatory complexities, yet ripe with potential for high-growth tech ventures.