Information on the Target

Electrify, founded in 2019, is the only car manufacturer in Latvia specializing in the production of electric minibuses designed for urban and intercity public transport, school transportation, and tailored customer needs. The demand for electric minibuses is rising significantly, particularly in areas with limited maneuverability, such as smaller cities featuring narrow streets and lower passenger flow.

Electrify is positioned at the forefront of sustainable mobility, aligning with the European Green Deal; substantial investments are directed toward improving public transport solutions across various European cities. The company’s commitment to producing environmentally friendly minibuses meets the growing demand for zero-emission transportation solutions.

Industry Overview in Latvia

The transportation industry in Latvia is undergoing a transformative shift towards electrification and sustainability, marked by both public and private sector initiatives aimed at reducing carbon emissions. Recent legislative and financial measures emphasize the importance of sustainable practices in public transport, creating fertile ground for innovation in the automotive sector.

The focus on zero-emission transport solutions is unprecedented, with investments targeting the development of infrastructure and technology to support electric vehicle operations, enhancing service convenience, and integrating multi-modal transport solutions. Emerging demand-responsive transport services reflect a shift in consumer preferences, prioritizing environmental responsibility and service efficiency.

As part of a broader European commitment, Latvia has seen an influx of funding aimed at accelerating green mobility. The government actively promotes sustainable transport initiatives through grants and tax incentives, further stimulating market demand for electric mobility solutions.

Electrify's product line of smart electric minibuses is well-suited for this evolving landscape, catering to the need for flexibility and efficiency in public transportation, thereby solidifying its role in Latvia’s green transition.

The Rationale Behind the Deal

ZGI Capital's €1.5 million investment in Electrify was primarily aimed at financing the company's expansion and ensuring the necessary working capital to support its ambitious growth strategies. This collaboration is a testament to ZGI Capital’s commitment to fostering technological innovation and sustainable practices within the Baltic automotive sector.

With plans to capitalize on the rising demand for electric minibuses, combined with supportive regulatory frameworks in Latvia and neighboring markets, this investment enables Electrify to expand its production capabilities and meet market demands effectively.

Information about the Investor

ZGI Capital is a prominent venture capital firm active in the Baltic region since 2005, specializing in investment in Small and Medium Enterprises (SMEs). The firm operates multiple investment funds, including its latest fourth-generation growth capital fund, which has gathered a total of €32.5 million for investment.

ZGI Capital’s expertise in guiding companies through their growth phases, along with its strategic partnerships within the investment community, positions it as a key player in supporting innovative businesses like Electrify, contributing to substantial advancements in the region's economic landscape.

View of Dealert

The investment in Electrify by ZGI Capital is a favorable decision, indicating strong confidence in the electric vehicle market in Latvia. With the increasing regulatory pressures for sustainability in the automotive sector and a clear demand for electrified public transport solutions, Electrify stands to achieve significant growth. ZGI Capital's strategic backing will not only bolster Electrify's production capabilities but also enhance its market penetration.

From an investor's perspective, involvement in Electrify aligns with the broader trend toward responsible investment and sustainability, which are increasingly demanded by both consumers and regulatory bodies. This trend positions Electrify advantageously to emerge as a leader in the electric minibuses segment, contributing positively to the investor portfolio.

Moreover, Electrify's existing international contracts and anticipated growth trajectory further signify its potential success in capturing the growing market share across Europe, especially in countries like Norway, which are leading the charge towards zero-emission vehicles.

In conclusion, ZGI Capital's investment in Electrify is a strategic move presenting significant opportunities for growth, reflecting an understanding of the future landscape of the transportation sector, where sustainability and innovation are paramount.

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