Updated: Jul 28
- SaaS deals and other golden opportunities in B2B.
International VC firms, especially European VC's, are more focused than ever on looking at tech startups in Spain to get a shot at joining in on the best and to some extent more unknown deals, especially the attractive and elusive B2B SAAS deals.
Looking at recent years it seems that American investors were quicker to identify this opportunity. Now more heavy-weight European VC's are joining them in the lookout for great investments in Spanish startups at Series A and B.
Many international VC investors are increasing the amount of time spent in Spain, traveling to all the startup hubs in Barcelona, Madrid, Valencia, Bilbao and Malaga, to have physical meetings with promising entrepreneurs in Spain.
Niklas Zennström, Atomico and Shmuel Chafets, Target Global are just two of the prominent VC investors emphasizing the importance of following the Spanish startup ecosystem with both eyes and ears wide open right now.
Niklas Zennström, founder of Skype and VC Atomico told Conco Días while in Madrid :
"I come to Spain every year, and every year I go with a better feeling, because the level of ambition of the projects is increasing and the level of entrepreneurs is also increasing, so I am sure that we will make more investments in the country."
Previously Atomico has invested in the successful Spanish startups Fon, JobandTalent and Ontruck.
And many European VC's like Target Global, HQ in Berlin, are now taking the actual step to opening a local Spanish office, in their case in Barcelona.
"There’s a decent local domestic market and there is a natural second market in South America. And actually in the US too — because Spanish is the second most commonly spoken language in America so when you start a company here you have that second market built-in which is very important — you can scale it."
15 most active international VC's in Spain
According to the report "Tendencias de inversión en España en 2019" from Fundación Innovación Bankinter, the 15 most active international VC investors in Spanish startups during 2019 were, in order of size of €investment in Spain:
1. DN Capital
2. Mangrove Capital Partners
4. Harbert European Growth Capital
5. The Venture City
6. Target Global
7. MIP - Milano Investment Partners
8. GP Bullhound
9. 360 Capital
10. Acom Ventures
11. Seal Rock Partners
12. Everblue Management
13. Rinkelberg Capital
14. SPF Investment Management
15. Prime Ventures
For B2B SAAS deals go to Spain!
With all the Unicorn stardust flying around the Spanish B2C celebrities Glovo and Cabify, it is easy to miss that it's really in the B2B SAAS department where the future gold is to be found.
To quote Jaime Novoa, K Fund, in one of his newsletter intros in Dealflow.es:
"(..), it's always worth remembering that some of Spain's biggest technology successes have happened in the B2B field. (..) to acknowledge the work of some great companies like Alien Vault, User Zoom and Flywire and up-and-coming ones like Devo, TravelPerk, ID Finance, Red Points, Carto and many more."
Based on my own interpretation, the message is loud and clear from Mona Müller, investor at Senovo VC in Munich, Germany: For attractive B2B SAAS startup investment opportunities, it is wise for more international VC's to go deal sniffing in Spain.
In the post "The Spanish Start-Up Ecosystem — an Investor’s Perspective", she writes:
"Based on a comparison of Crunchbase data, the UK, France, and Germany, (...) Spain, while still the smallest in absolute terms, experienced the fastest growth in number of B2B SaaS deals per annum, mainly driven by early stage rounds."
One of the quoted experts in the same post expresses:
"“Up until now, Spain has not produced a big software company. The market still needs to prove itself. Now to 5 years from now, we expect a B2B SaaS explosion.”
International VC's stand for 57% of investment volume in 2019
"Foreign investment funds continue to bet on Spain and have an increasingly relevant presence", it says in the mentioned report "Tendencias de inversión en España en 2019".
It underlines the continued value-add in terms of actual volume brought in to Spain by international investors, paving an easier way for Spanish startup founders to raise bigger series B and C rounds in the future, without having to fly around the world fund-raising.
"Although they participate only in 15.6% of operations, they account for 56.8% of the investment volume in Spain. These type of funds participate in Series B and C operations, i.e. between $5M and 20M."
Local family offices joining the startup bonanza
There are now definite signs that the Spanish family offices, after many years of hesitation, and rightly so, are finally ready to further diversify their investments and take a risk with putting their money into growing Spanish startups, at a time when the Spanish startup ecosystem is mature enough.
All in all, it definitely looks like the international VC investment will be a lot higher in Spain, coming from a lot more corners of the world in 2020 and beyond, with much stronger competition for the best startup deals from national VC's, business angels and family offices!
Crafted by Caroline Lagergren
What do you need to know about Spain's startup ecosystem? Get this 70 pages, data-rich* report for clarity! (€20): REPORT: Spain's startup ecosystem and digital economy * Packed with names you will want to contact. ;)