The JEREMIE Program and Hungary’s VC Ecosystem
Hungary’s venture capital environment has grown well over the past few years. One of the biggest drivers of this often up-and-down growth was the JEREMIE (Joint European Resources for Micro to Medium Enterprises) program.
The European Commission and European Investment Fund originally launched this program to allow small and medium businesses to access finance more easily. They could access finance using EU structural funds.
Hungary used JEREMIE in the late 2000s to help start-ups and growing companies fill a wide gap in private funding. It is important to note that venture capital markets in Central and Eastern Europe are substantially smaller than those in the U.S. or Western Europe. JEREMIE bridges the divide by creating channels through which EU funds flow into venture capital via intermediaries. These funds are also used for other risk-financing instruments.
What the JEREMIE Program Does
The JEREMIE program did not directly invest in businesses. Instead, it established what is known as funds of funds. These funds were invested in smaller VC funds or financial intermediaries. The intermediaries then invested in SMEs. This created a structure that helped recycle capital. The repayments continued to flow back into the same revolving instruments.
In Hungary, JEREMIE historically focused on venture capital, but it also supported loans and guarantees. The main goal was to provide enough support for companies unable to get funding on their own. These companies, in particular, include startups and tech firms with strong growth prospects.
The first JEREMIE phase in Hungary began around 2010, when the program started backing the first venture capital funds in the country. These funds combined public financing with private capital. Over the years that followed, this stable support helped create a more active VC market locally.
JEREMIE’S Impact on the VC Market
JEREMIE had an unmistakable structural effect on Hungary’s VC ecosystem. A 2014 academic study found that 28 JEREMIE-backed VC funds were founded in four rounds. Around 130 billion Hungarian forints (HUF) were allocated to these funds. The government also participated in this process.
The VC funds played a critical role in filling capital gaps in Hungarian private equity. Before JEREMIE, promising SMEs found it nearly impossible to attract investment. This was mainly due to banks viewing startups as too risky to lend to. JEREMIE funds directly helped overcome this challenge.
VC funds supported by JEREMIE include vehicles such as X-Ventures Beta. These target early-stage companies that can prove growth potential beyond ideas on paper. The fund is interested in helping firms with prototypes and early revenue. It also expands its reach across sectors like IT, biotech, and logistics.
JEREMIE’s Role in Hungary’s Startup Scene
JEREMIE also helped create a wider financing base for Hungarian startups. In the 2010s and early 2020s, VC firms started thriving despite limited private capital. Many firms, including Hiventures, Day One Capital, and PortfoLion Capital Partners, now operate alongside earlier generations of JEREMIE-backed funds. Many of these funds have already completed their investment periods.
In 2025, the Hungarian startup ecosystem boasts some funding volume and activity. According to ecosystem analysts, Hungary now ranks among the emerging and developing European startup hubs. It has hundreds of active startups and more than $100 million in total startup exits.
This strong growth highlights a stronger venture capital culture in the country. Local VC firms provide several ticket sizes for funding early to growth stages. International investors are also increasingly interested in Hungarian startups.
Challenges and Criticism
The JEREMIE program has been criticized, which is not surprising. Observers argue that too much public involvement in VC markets can distort them. Academic work also suggests that government finance should be a catalyst. It should not permanently replace private capital. Their view is that private investors must still lead the market to keep it sustainable.
At the same time, JEREMIE’s role in overcoming funding barriers is undeniable. Hungarian entrepreneurs credit the program with giving them access to capital they would otherwise never have had.
The JEREMIE Program Stays Strong
JEREMIE is less important today for the money it once provided and more important for the habits it is helping to create. The program made it normal for companies to seek venture capital as a financing option in Hungary. It also encouraged stakeholders to think long-term rather than merely focusing on each new deal. What happens in the future will define whether Hungary remains a self-sustaining innovation market or if it chooses to remain dependent on policy-driven capital.
https://www.emerald.com/jeee/article/16/4/977/1238201/Spurring-entrepreneurship-with-public-venture
https://www.eif.org/what_we_do/resources/jeremie/index.htm
https://ideas.repec.org/a/ora/journl/v1y2014i1p883-892.html
https://core.ac.uk/download/pdf/161056044.pdf
https://startupgenome.com/contents/report/gser-2025_4786.pdf
https://greendeal.mt/services/energy/investing-in-a-climate-neutral-and-circular-economy/
https://www.startupblink.com/startup-ecosystem/hungary
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