- Why fashion tech, ag tech and auto tech are likely to breed more impact unicorns in Spain.
Recover with CEO Alfredo Ferre Garcia, a spinoff from the Alicante based textile corporation Hilaturas Ferre, is Spain's second or maybe even first impact unicorn. Goldman Sachs valued the cotton fiber recycling company at $1.1 billion in June 2022, upon investing $100M.
It could be argued that the first sustainable unicorn in Spain is Wallbox. In June 2021, just a few days after Flywire was dubbed a unicorn, came the announcement that Wallbox, selling chargers for electric vehicles, would gain the same shimmering status. Reuters's headline read "Spanish EV charger maker Wallbox to go public in $1.5 bln New York SPAC deal".
I am certainly no "unicorn police", I just know that to join the VIP unicorn family by taking the SPAC route to reach a one billion valuation, is somewhat frowned upon/debated. Oh well.
Overall, SPAC or not, the growth of these magical creatures in Spain during the last year has been so fast that it's easy to lose count. As of October 2022, there are now 14 fully fledged unicorns, at least according to Pablo Ventura Aranguren, Venture Capitalist in his recent post titled "The underestimated factor -luck". He writes:
"I am aware of 14 unicorns that have started in Spain, and I feel super fortunate for having participated indirectly in three of them."
"These 14 companies Factorial HR, Jobandtalent, Flywire, Glovo, Devo, idealista, Cabify, TravelPerk, Copado, Wallbox Chargers, Fever, Recover, Domestika and eDreams ODIGEO have taken an average of 9.7 years to reach the 1 billion Euro valuation."
"Factorial and Wallbox were exceptional in only taking 6 years, while only Glovo managed it in 4."
Being super excited about this slightly greener unicorn to multiply, I am thinking that maybe Jobandtalent (unicorn status 2021) could also be said to be an Impact unicorn-ish, for supporting the UN's Sustainable development goal 8 Decent work. What do you think?
In any case, Spain now has at least one impact unicorn. Probably two. That is huge. In this post I am exploring two additional candidates, short-term and long-term, making it 3 Spanish impact unicorns altogether.
National, Entrepreneurial DNA matters for unicorn creation
I believe that National, Entrepreneurial DNA matters a lot when it comes to creating exceptionally prosperous companies in any country. My initial thinking is based on the fact that the first unicorns in Sweden, (I am Swedish), were Skype (Telecom) and Spotify (Music).
Sweden has a long and proud heritage from ruling the Telecommunications industry with Ericsson as a poster child and has an unusual amount* of music legends. Names like Abba, Roxette, Avicii and Swedish House mafia may ring some bells?
*It is a tiny country with 10 million people.
Spain's path to international brand fame comes from the likes of Fashion Retail successes Zara and Massimo Dutti, to name the biggest brands within the Inditex-empire. Another famous Spanish household brand is Mercadona, the giant Food/ Supermarket chain that first started off in Valencia by selling local, fresh fish for affordable prices.
Historically, three of the most important industries in Spain are Textile, Automotive and Food. These sectors are also under strict surveillance because of their Greenhouse gas emissions, effect on the water ecosystems, waste generation and resource consumption, so it makes sense that they will also be birthing the first sustainable/impact unicorns in Spain.
Spanish fashion,"Made and/or designed in Spain", is highly valued globally and has managed to become much more cost-efficient during the pandemic. Overall, global sales are up due to strong export gains: 40.6% of sales in 2021 were outside Spain.
The Spanish agri-food industry represents 2.7% of the GDP. There is a clear growth of interest in the food industry paired with innovation i.e. Foodtech/Agtech. In 2021 this sector received investments of €695 million, 3x more than in 2020.
The Spanish automotive industry represents 10% of Spain’s GDP and 18% of total exports. (including vehicles and auto-parts). Spanish plants manufactured 2.1 million vehicles in 2021, including 16 electrified models.
Against this background, these three innovative tech companies in Spain are likely to have a positive impact on the much needed transformation of these named sectors, to become much more sustainable and to lead us to a healthier planet in general.
Alfredo Ferre Garcia, CEO, Recover - present unicorn (Fashion tech) Recover, as mentioned, is already a sustainable unicorn since June 2022 when investor Goldman Sachs injected $100 Million at ∼ $1.1 billion valuation. Recover was founded in 2006 as a spinoff from the textile company Hilaturas Ferre in Valencia. The majority was sold to the US fund STORY3 Capital Partners, led by a former Goldman Sachs banker. The Recover headquarter is based in Banyeres de Mariola, Alicante. On their website they state: "We have perfected the art and science of handcrafting sustainable recycled cotton fiber over 70+ years, across four generations of family in Spain. Today, we offer a scaled solution to transform textile waste into low-impact, high-quality sustainable recycled fiber. We are on a mission to help create a sustainable future by solving one of the world’s biggest environmental issues." Furthermore: "Our goal is to have 200.000 metric tons of annual capacity by 2025. The new facilities will process post-industrial, as well as pre-consumer and post-consumer waste." Judging by his last name, the CEO Alfredo Ferre Garcia would be one of the great grandchildren now leading this impressive legacy, inspiring many more fashiontech ventures to be founded in Spain.
Félix García, CEO Kimitec - short-term unicorn? (Ag tech)
Félix García, CEO Kimitec for the last 20 years is well-known in the agriculture circles in Spain. He describes the company as a world leader in "vegetal nutrition" with activities in +70 countries. On his LinkedIn profile he states:
"Economist by training, biologist by vocation. One day I set out to change the way food was produced. Just choosing to look away when knowing that there are traces of synthetic chemistry in my children's food wasn't an option. This is reflected in everything I do and everything I am. Also, in the business model I have built - and for which I live every day - based on responsibility, respect for people's health, the environment and economic sustainability." (translated) Their solutions replace chemicals in agriculture with natural products and are estimating revenues to grow +80% YoY this year 2022 to reach €63 M. Most recently Kimitec has gotten media's attention when the bank Santander bought 5 percent. CEO Santander, António Simões says: “It’s a strategic deal for Santander. Not only are we entering the biotech industry; we’re [entering] alongside one of scaleups with the greatest chances of becoming the most profitable unicorn in the years to come. With this agreement, we will add value to our portfolio of agribusiness customers”.
Antonio Espinosa, Co-Founder & CEO LIUX - long-term unicorn? (Auto tech)
Isn't that the Auara water bottle guy?, you might ask yourself. Antonio Espinosa de los Monteros is now also the co-founder and CEO of LIUX, a very unexpected car manufacturer determined to make a holistically sustainable Spanish car. "A sustainable car means sustainable raw materials, sustainable production, sustainable use and sustainable recycling. It is not enough to make an electric car from batteries, or from a fuel cell, to make it a sustainable project." Together with his co-founder David Sancho Domingo (also the car lover and expert) they are "opting for a flexible platform, with modular batteries, suitable for carrying chemical batteries, for installing a tank to store hydrogen and a fuel cell, or for an extended autonomy hybrid system with chemical batteries and a small combustion engine. A system that allows you to use two battery modules for each day and expand two more modules to make a long trip." "A large part of the outer bodywork will be made of vegetable fibers, especially flax, formed and molded with the help of vegetable resins. The objective is that 90% of the resins are based on soy and other organic elements." "The objective is to run small factories, with the capacity to produce about 25,000 units per plant and to place different factories in different geographical areas, close to demand." The name of the car? Animal! Predicted to be commercialized by 2024. What about safety? One obvious question they will need to respond to. That aside, the project has all of the components of a true joy ride. Or asombroso in Spanish which is the word the acclaimed car reporter Javier Moltó uses. All facts are taken from his article for Km77.com.
NOTE to reader: All companies have been selected by Caroline Lagergren, founder Expand To Spain, without any outside interference, based on what kind of innovation and people drive actual societal change for the better. We also try to dig up the lesser-known diamonds.
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By Caroline Lagergren, founder of Expand To Spain