In a bid to energize the startup ecosystem in Cyprus, the Ministry of Finance, in collaboration with the European Investment Fund (EIF), has launched the Cyprus Equity Fund (CEF). With €27 million at its disposal, drawn from Cyprus’ Recovery and Resilience Facility (RRP) and residual funds from the JEREMIE programme, the CEF aims to invigorate the local startup scene by offering much-needed risk financing and support.
Leading the charge are Demetrios Zoppos and Yiannis Eftychiou, co-founders of the venture capital firm 33East, selected to manage the CEF’s funds. Their journey, transitioning between Cyprus and the UK, reflects their commitment to nurturing startups within the island’s unique ecosystem.
The impetus for the CEF arises from a recognized need for a vibrant venture capital scene to foster an innovative startup environment. This need is underscored by the success stories of various startup ecosystems around the world, where substantial VC investment has led to exponential growth and the birth of new market leaders. The initiative mirrors efforts in other countries, like Greece’s establishment of a fund-of-funds to stimulate its venture capital scene, leading to significant investments and the rise of unicorns within just a few years.
Zoppos and Eftychiou bring a wealth of experience and a forward-thinking approach to their roles. Zoppos, who co-founded the luxury home rental company onefinestay, and Eftychiou, with a rich background in investment and consulting, share a vision to build a future where Cyprus’s economy thrives on innovation, technology export, and compelling opportunities for its youth.
33East plans to operate on a two-tier investment strategy. The first tier will focus on investing €2.5 million in up to 15 early-stage, pre-revenue startups over three to four years, providing initial commercial backing for ventures still fine-tuning their technological offerings. The second, more substantial tier will deploy the remaining €35 million into startups that are a step further along in their development – those that have begun to generate revenue or have secured early-stage funding.
The team at 33East has already engaged with over 100 entrepreneurs, discovering a diverse range of startups across sectors such as robotics, healthtech, renewables, fintech, and software development. Their strategy includes reaching beyond Cyprus’s borders, leveraging the island’s position to test and scale ideas in larger markets, a critical step given the limitations of the local economy.
Despite the challenges posed by the small size of the Cypriot market, Zoppos and Eftychiou are optimistic. They believe that with the right strategy, Cyprus can export innovative technologies and foster a vibrant startup ecosystem. A key to unlocking this potential is the Cypriot diaspora, whose connections, experience, and mentorship can play a pivotal role in elevating local startups to the global stage.
The duo is not only focused on securing the necessary funds to meet their investment objectives but also on curating the right mix of investors. They aim to attract local institutional investors, such as pension funds and large corporates, to support the ecosystem. Drawing inspiration from models in the UK and the US, where institutional investors play a significant role in funding startups, they see substantial potential for similar strategies to thrive in Cyprus.
As Cyprus stands on the brink of a transformative era for its startup ecosystem, the efforts of Zoppos, Eftychiou, and the CEF signal a promising future. Through strategic investments, mentorship, and fostering a collaborative environment, the goal is to set in motion a virtuous cycle of innovation and growth. This ambitious project is a testament to the belief that with the right support, startups in Cyprus can not only succeed locally but shine on the international stage. As the island’s startup landscape evolves, the work of pioneers like Zoppos and Eftychiou will be instrumental in shaping its future, crafting a narrative of success driven by innovation, creativity, and a bold vision for what lies ahead.
