Gasoline to reverse after adjustment. Several of the relevant venture capital managers focused on startups have launched in recent months to raise new vehicles with which they will secure that money to support projects in this new phase. Kibo Ventures aspires to raise 200 million this year for its new fund, while JME Ventures is also doing the same with a smaller vehicle. Two other managers also consolidated in the Spanish market, such as K Fund and Seaya Ventures, give the touches to their ‘creatures’. Meanwhile, the presence of the Official Credit Institute (ICO) flies over with its fund of public funds for which another 2,000 million extra have been reserved.
The startup ‘vintages’ of 2020 and 2021 were fundamentally marked by frenzy. Almost unlimited money and the euphoria over the digitization of life after the pandemic led to a flood risk in the sector. Now, with a significant adjustment in valuations and investment, there are funds that are trying to rearm for this new ‘batch’ of startups. In the Spanish market, the pieces are moving so that this 2023 there will be more gasoline, with the hope that international investors will open the tap more after scares like the one at Silicon Valley Bank.
Kibo Ventures, a shareholder of Capchase, Devo, Jobandtalent or Exoticca, works in two vehicles, although one of them is the only one focused on ‘pure’ startups. This is the second ‘opportunity fund’ of the family and seeks to focus on the most advanced faces (what is called ‘scale-up’ in the slang). The objective is to reach 200 million euros and tries to close this year 2023. The other, under the name Nzyme and which has just been authorized by an investment strategy focused on acquiring the majority of shares and applying technology to create value.
JME Ventures, a partner of Lingokids, Genial or Odilo and a shareholder of Flywire and Jobandtalent itself, closed its third fund in 2019 with more than 60 million euros to invest. You have now fixed the collection process for a new vehicle that is larger in size than the previous vehicle. Other managers have already submitted credentials to the stock market regulator with different fund initiatives.
This is the case of Galdana Ventures, led by Javier Rubió (co-founder of Nauta Capital) and Didac Lee, among others, has launched one of up to 650 million that invests in other funds -it has already made a first closing of 600 million-. At the end of last March, two other managers did the same: Trea Asset Management launches one focused on health for 25 million euros and the Spanish-Israeli Swanlaab launches another for initial faces (with tickets of up to 6 million euros). of 61.2 million. There are others who launch themselves to the task of collecting. It’s not going to be easy.
The current market situation, marked by uncertainty, not only affects entrepreneurs seeking capital for their projects. Raising new funds also represents a significant challenge for managers, who must convince potential investors to invest their money in this sector. In this sense, the presence of the Official Credit Institute (ICO) will once again have a relevant weight, as it did in the past decade through the Global Fund. To date, the Next Tech fund has authorized $335 million of public money for various funds (K Fund, Seaya and Cathay) and companies. After the ‘extra’ commitment announced, another 3,600 million public money is available to convert into this type of vehicle.
Despite the fact that there is a large amount of dry powder in the pantry of the managers, the investment has not yet taken off. The firms assure that they continue to analyze projects but the decisions take longer and fewer operations are signed. In 2022 there was a relevant slowdown, marked above all by the cooling off of the euphoria of international funds. According to data from the sector’s employers’ association (Spaincap), investment was cut by 30% to slightly below 1,500 million.
The first quarter has continued the trend, with more internal rounds and more bets on debt. Most Spanish investors expect a greater recovery to begin from the second part of the year, although they still have doubts. The key, according to industry sources, is to find where the valuation floor is. “No one wants to enter expensive,” they explain. By the time you find yourself, many of them want to have a full pantry.