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The 2 biggest startup exits in Spain 2020 from the same buyer

Updated: Apr 13, 2023

- 3 possible key factors

Credit: Montage of image from Unsplash and company logos.

EQT group was behind both of the biggest acquisitions in Spain during 2020. What does this Swedish private equity firm understand about the startup ecosystem in Spain that perhaps you don't yet?


idealista, based in Madrid, was acquired at a transaction price of EUR 1.3 billion.

Freepik, based in Malaga, was acquired at a transaction price of EUR 250 million*. *NOTE: general assumption, not officially stated.



When adding up these quantities of invested capital in the Spanish startup ecosystem, I think this quote from the Nordic buyer turns into a massive understatement:

"The investment in idealista further demonstrates EQT’s commitment to pursue investment opportunities in the region." - Carlos Santana, Managing Director, EQT group, Spain.

Because part from the actual pile of money spent, there was also a serious investment in time. For the idealista deal alone, EQT group showed tons of patience and determination, spending almost two years in getting it all finalized.


"We worked on this transaction for 18 months, almost 2 years. That gave us a lot of advantage in understanding the asset and how the business was being managed, and it allowed us to be prepared for the final sprint and win the deal," Carlos Santana, managing director, EQT group Spain said during a digital event organized by GP Bullhound.


How come the same private equity firm manages to swoop up two of the most valuable gems from the Spanish tech soil? What made these guys so relentless in pursuing them and ultimately closing the deals at some of the highest price levels seen in Spain so far?

These possible 3 key factors might explain their conviction in seeing these deals through, despite the pandemic making the geographical distance more of a challenge.


1. Mega-accelerated digitalization in Spain


Even before the pandemic, Spain was showing clear signs of adapting to a more efficient, digitalized world and there was a steady change in behavior - slowly but surely or "poco a poco" in Spanish - in terms of overall online presence, access to high-speed internet, growth of digital payments and usage of social media to name a few.


But many argued that it was all taking too much time and that Spain risked being left behind by the modern world if they didn't pick up the digital pace so to speak. Then the pandemic happened and already two months into quarantine, Spain was more digitalized than ever.


Although it has been a mostly forced and all too quick shift for many Spaniards to adjust to, it does pave the way for cost-efficiencies to make it into the risk-award calculations and certainly has made the online market in Spain sky-rocket, compared to its European neighbors. Or expressed in fancier words used by EQT group in their press release:


"idealista’s underlying market is supported by favorable secular mega trends, such as the increasing shift from offline to online marketing spend."


2. Spanish language no longer a hurdle for market expansion


Although there are many exceptions of "born global" Spanish startups, the prejudice still remains true that many growing tech companies in Spain are content to remain within the country's borders. And when/if the 47 million people-market starts to feel too limited there is always a wealth of connections to contact in LATAM, without having to change languages.


But the previously stubborn language-obstacle between Spain and the rest of the English speaking Europe has become less of a problem today, with all the translation tools easily accessible and the made-in-Spain software’s being built in a self-explanatory and user-centric way, turning them more or less language independent.


So when a company like idealista becomes market leader, and by many metrics also market owner, being the preferred online real estate classifieds platform in Spain, the potential to further roll out its services at Northern European latitudes - and beyond - seems enormous.


"We are impressed by the market leading position idealista has built over the past 20 years and EQT is excited to support idealista and its entrepreneurial management team in this next stage of growth." - Bert Janssens, EQT Partner.


Similarly, for further market expansion of Freepik's offering the opportunities are endless:


"Moreover, by leveraging EQT's digital expertise and global presence, Freepik plans to further penetrate existing markets, such as US and Asia, ultimately, aiming to become the market leading and go-to platform for online content creators and functional users around the world." - EQT group, press release.


3. Underpriced deals within SAAS and Marketplace


It does not come as a huge surprise that both of these acquisitions happen to fall under the right now, for international investors, super attractive verticals referred to as SAAS, Software-as-a-service (idealista) and Marketplace (Freepik). As European VC's increase presence in Spain looking for startups, these verticals, adding Fintech, seem to be the most appealing.


Considering that the search for Tech talent leads to Spain, we can just let the numbers from the two press releases for the Freepik acquisition and the idealista acquisition speak for themselves:


"With 32 million monthly users and 5 billion downloads to date, Freepik offers over 10 million high-quality and curated graphic resources, including icons, vectors, photos, and templates."


"idealista supports approximately 40,000 real estate agents and 38 million unique monthly visitors across Southern Europe by providing an online real estate classifieds marketplace for home buyers and sellers."


I'm hoping for international investors to also realize the potential of putting their money into some of the impressive deep tech companies being built in Spain but for now these SAAS and Marketplace deals surely serve as powerful eye-openers to dive deeper.


--> I would love for you to share your thoughts or opinions in the comment section.


By Caroline Lagergren, founder of Expand To Spain


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