There is no doubt that 2023 was a tough year for startups and the broader tech sector - where investment activity plummeted across the board, early stage businesses failed at a rate not seen in over a decade, and big tech lay-offs left large swathes of top talent suddenly and unexpectedly unemployed.
However, while we were not totally shielded from this activity, and spent much of the year working with our portfolio under tough conditions, we also had much to celebrate in 2023 - and consider it a landmark year in the life of the firm.
Reflecting on this over the Christmas break, and now looking towards the year ahead, it felt right to reflect on our achievements in 2023 (as we did at this time last year), and the work we’ve done across Iberian and Latin American tech & venture capital.
Briefly, an overview of the things that made us proud in 2023:
In 2024, we expect tough times to continue for startups across the board, but especially those that raised in 2021 and 2022, as the realities of inflated valuations and non-monetizable business models come home to roost. However, we remain bullish on the top performers in our portfolio, including Exoticca, Urbanitae, Factorial, Digibee, as well as smaller players Abacum, IF Returns, Bloobirds, Aldara (prev. Lumo/Nestor), Growpro and tl;dv - for managing the impressive combination of an ability to effectively cut costs while continuing to grow.
Since the early days of Kfund we’ve strongly focused on investing in companies that we believe have the ability to grow efficiently - one of the main reasons why we’ve stayed away from very capital intensive businesses - and also why we believe the current health of our current portfolio is strong.
In 2024 we’ll see a large quantity of companies that have survived on prior rounds or internal bridges forced to go to market, which we believe will result in round pricing across the board reflecting considerably more reasonable market values.
We’re already seeing considerable activity at the early stage across Southern Europe and Latin America. At the pre-seed stage we’ve seen a significant increase in dealflow in the past few months, reflecting the unprecedented number of founders who left scale-ups or big tech, or saw their companies fail in 2022/23, going at it again.
Seed/Series A remained quieter in Southern Europe for several months in 2022 and 2023, however we are tracking a large quantity of businesses that we’re excited to work with as they come to market this year and we’re also seeing a clear uptick in fundraising activity.
While in Latin America, things are still quiet but less so than Southern Europe. There’s major concentration on the top performers, but we’re also seeing a number of sizeable funds being raised, companies raising capital (including a number of relevant oversubscribed rounds) and, although very few, exits also happening (such as Pismo’s acquisition by Visa).
Europe-wise, at the later stages we believe the year will gradually see a larger number of exits, driven by stabilising or decreasing interest rates again encouraging fundraising, but we’ll also see a number of high profile failures of over-funded, unstable scale-ups that rode the waves up to 2022.
While we’re by no means out of the woods yet, we do believe the combination of increasing dealflow, dry powder to deploy, and more realistic valuations will make for a good year for VC.
As generalist investors we’re required to keep tabs on a variety of sectors, and for 2024 it will be little surprise to hear we’re bullish on verticalized AI. Up until now we’ve observed major operations primarily being conducted by large tech companies, with a plethora of GPT-wrappers proliferating at the earler stages.
However, with infrastructure now in place and market literacy increasing considerably, we expect to see exciting applications across use cases - notably health, fintech, and cybersecurity - that can benefit from verticalized expertise and more specific training of tools and models.
We’re also hopeful for a resurgence in fintech, namely in payments, and continued energy in climate - across energy transition, climate fintech, and green hydrogen - albeit with less hype around rounds as the quantity of new businesses begins to better match the dry powder available from funds across Europe.
Having dived into the space in 2023, we’re also looking forward to tracking developments in cybersecurity, alongside a potential resurgence for crypto driven by potential regulatory news around ETFs.
Having grown considerably in both 2022 and 2023, this year will be a year of bedding in for the Kfund team. We were delighted to add Nadhila Wardhana, Silvia Sancho and Jorge Campo into the investment team, from Speedinvest, IE University and Universidad Carlos III respectively, alongside Maria de Medrano from Pavia e Ansaldo into our legal department, Celia Buendia Lopez joining us from KPMG into our finance team, and Maria Recalde Renteria as our new office manager from EQT Ventures.
We also added in Jonathan Sousa (ex-Scoop, Loom, Dropbox) in Lisbon and Juanjo Mostazo (Homa Games) in Malaga as Venture Partners - to bulk out our diligence and portfolio support across customer success and tech.
As a result, and because we’re moving into a bigger office to fit our ever-growing team, this year will be a period of settling in and encompassing new ways of working, an increasingly international team, and greater distinction between our funds and sub-teams.
2024 will likely be the first year we are investing actively out of more than four funds at once - a major milestone in the Kanoar Ventures journey.
Alongside this, we’re looking forward to closing Kfund 3 - to add a third vintage to funds 1 & 2, including portfolio companies such as Factorial, Exoticca, Urbanitae or Barkibu, IF Returns and Growpro respectively. We’re also actively exploring sector specific funds and new types of financial instruments - so watch this space for news on new vehicles to keep developing and increasing the maturity of the ecosystem in Southern Europe.
We’re actively deploying capital from Pre-seed to Series B, and we’re keen to chat to entrepreneurs across Europe and Latin America building software businesses that have the potential to become the market leaders of tomorrow. Drop us a line!
And lastly we’re excited to take the next step in our ESG journey - not only continuing to formalise our climate tech investment thesis, but also producing our second impact report for this year - using tooling to increase the complexity and depth of our portfolio analysis.
This is a journey we’re early on, and a serious undertaking, but we’re confident in the work we’ve done, in external partners, and in the appetite of our portfolio to grow and learn - making 2024 an exciting year for this work.
In the years since we founded Kanoar, we’ve learned that believing in ourselves and maintaining a winning attitude are key to our continued success.
To our team, partners, and all those who’ve been part of this journey, thank you! Your support and collaboration have been instrumental in our achievements.
We are committed to being the top venture capital firm in Southern Europe and Latin America, and can’t wait for what’s to come in 2024. ¡Vamos!
--
Have an idea you want to share with us? Let us know.
There is no doubt that 2023 was a tough year for startups and the broader tech sector - where investment activity plummeted across the board, early stage businesses failed at a rate not seen in over a decade, and big tech lay-offs left large swathes of top talent suddenly and unexpectedly unemployed.
However, while we were not totally shielded from this activity, and spent much of the year working with our portfolio under tough conditions, we also had much to celebrate in 2023 - and consider it a landmark year in the life of the firm.
Reflecting on this over the Christmas break, and now looking towards the year ahead, it felt right to reflect on our achievements in 2023 (as we did at this time last year), and the work we’ve done across Iberian and Latin American tech & venture capital.
Briefly, an overview of the things that made us proud in 2023:
In 2024, we expect tough times to continue for startups across the board, but especially those that raised in 2021 and 2022, as the realities of inflated valuations and non-monetizable business models come home to roost. However, we remain bullish on the top performers in our portfolio, including Exoticca, Urbanitae, Factorial, Digibee, as well as smaller players Abacum, IF Returns, Bloobirds, Aldara (prev. Lumo/Nestor), Growpro and tl;dv - for managing the impressive combination of an ability to effectively cut costs while continuing to grow.
Since the early days of Kfund we’ve strongly focused on investing in companies that we believe have the ability to grow efficiently - one of the main reasons why we’ve stayed away from very capital intensive businesses - and also why we believe the current health of our current portfolio is strong.
In 2024 we’ll see a large quantity of companies that have survived on prior rounds or internal bridges forced to go to market, which we believe will result in round pricing across the board reflecting considerably more reasonable market values.
We’re already seeing considerable activity at the early stage across Southern Europe and Latin America. At the pre-seed stage we’ve seen a significant increase in dealflow in the past few months, reflecting the unprecedented number of founders who left scale-ups or big tech, or saw their companies fail in 2022/23, going at it again.
Seed/Series A remained quieter in Southern Europe for several months in 2022 and 2023, however we are tracking a large quantity of businesses that we’re excited to work with as they come to market this year and we’re also seeing a clear uptick in fundraising activity.
While in Latin America, things are still quiet but less so than Southern Europe. There’s major concentration on the top performers, but we’re also seeing a number of sizeable funds being raised, companies raising capital (including a number of relevant oversubscribed rounds) and, although very few, exits also happening (such as Pismo’s acquisition by Visa).
Europe-wise, at the later stages we believe the year will gradually see a larger number of exits, driven by stabilising or decreasing interest rates again encouraging fundraising, but we’ll also see a number of high profile failures of over-funded, unstable scale-ups that rode the waves up to 2022.
While we’re by no means out of the woods yet, we do believe the combination of increasing dealflow, dry powder to deploy, and more realistic valuations will make for a good year for VC.
As generalist investors we’re required to keep tabs on a variety of sectors, and for 2024 it will be little surprise to hear we’re bullish on verticalized AI. Up until now we’ve observed major operations primarily being conducted by large tech companies, with a plethora of GPT-wrappers proliferating at the earler stages.
However, with infrastructure now in place and market literacy increasing considerably, we expect to see exciting applications across use cases - notably health, fintech, and cybersecurity - that can benefit from verticalized expertise and more specific training of tools and models.
We’re also hopeful for a resurgence in fintech, namely in payments, and continued energy in climate - across energy transition, climate fintech, and green hydrogen - albeit with less hype around rounds as the quantity of new businesses begins to better match the dry powder available from funds across Europe.
Having dived into the space in 2023, we’re also looking forward to tracking developments in cybersecurity, alongside a potential resurgence for crypto driven by potential regulatory news around ETFs.
Having grown considerably in both 2022 and 2023, this year will be a year of bedding in for the Kfund team. We were delighted to add Nadhila Wardhana, Silvia Sancho and Jorge Campo into the investment team, from Speedinvest, IE University and Universidad Carlos III respectively, alongside Maria de Medrano from Pavia e Ansaldo into our legal department, Celia Buendia Lopez joining us from KPMG into our finance team, and Maria Recalde Renteria as our new office manager from EQT Ventures.
We also added in Jonathan Sousa (ex-Scoop, Loom, Dropbox) in Lisbon and Juanjo Mostazo (Homa Games) in Malaga as Venture Partners - to bulk out our diligence and portfolio support across customer success and tech.
As a result, and because we’re moving into a bigger office to fit our ever-growing team, this year will be a period of settling in and encompassing new ways of working, an increasingly international team, and greater distinction between our funds and sub-teams.
2024 will likely be the first year we are investing actively out of more than four funds at once - a major milestone in the Kanoar Ventures journey.
Alongside this, we’re looking forward to closing Kfund 3 - to add a third vintage to funds 1 & 2, including portfolio companies such as Factorial, Exoticca, Urbanitae or Barkibu, IF Returns and Growpro respectively. We’re also actively exploring sector specific funds and new types of financial instruments - so watch this space for news on new vehicles to keep developing and increasing the maturity of the ecosystem in Southern Europe.
We’re actively deploying capital from Pre-seed to Series B, and we’re keen to chat to entrepreneurs across Europe and Latin America building software businesses that have the potential to become the market leaders of tomorrow. Drop us a line!
And lastly we’re excited to take the next step in our ESG journey - not only continuing to formalise our climate tech investment thesis, but also producing our second impact report for this year - using tooling to increase the complexity and depth of our portfolio analysis.
This is a journey we’re early on, and a serious undertaking, but we’re confident in the work we’ve done, in external partners, and in the appetite of our portfolio to grow and learn - making 2024 an exciting year for this work.
In the years since we founded Kanoar, we’ve learned that believing in ourselves and maintaining a winning attitude are key to our continued success.
To our team, partners, and all those who’ve been part of this journey, thank you! Your support and collaboration have been instrumental in our achievements.
We are committed to being the top venture capital firm in Southern Europe and Latin America, and can’t wait for what’s to come in 2024. ¡Vamos!
--
Have an idea you want to share with us? Let us know.
