In the image above, Jaime taking a nap while Miguel Arias explains something interesting and Iñaki Berenguer shows excitement
If you’ve been somehow involved in the evolution of the Spanish startup sector, you’ve probably often heard that what the country needs to expand -and improve- its ecosystem is more second (and third) time entrepreneurs (good read on the topic), more senior employees with experience scaling companies that have taken them to the next level, more distribution of wealth through stock options, etc etc.
A lot of these arguments tend to fall on the shoulders of entrepreneurs and employees of tech companies, but I think there’s another way of looking at it.
Spain does need all of the above, but one key ingredient -perhaps even more important than those aforementioned- that’s often overlooked is the need for the Spanish investor landscape to mature and become more sophisticated, engineering-driven and technical.
When I think about the development of the Spanish VC landscape I tend to think of it in layers or generations.
The first few local VC firms were created right after the dotcom bubble, between 2000 and 2005, and on many occasions those behind such companies came from a consulting or financial services background. I tend to think of these firms as the first generation of Spanish venture capitalists.
The second generation would be firms launched in 2010 - 2015, led by former Internet entrepreneurs that saw success with their previous companies. We’re an example of this, as Iñaki Arrola built and sold coches.com to Santander, and so is Samaipata, which Jose del Barrio created after selling La Nevera Roja (food delivery) to Rocket Internet.
There are more examples of this, but one common denominator is that the prior successes of these entrepreneurs were in sectors such as ecommerce and marketplaces, which most of the time don’t have in software and engineering their main differentiating factors.
The third generation of investors, whether it’s new firms, existing ones expanding their teams and business angels, will come from entrepreneurs-and-operators-turned-investors who have built and scaled software-driven startups (most likely B2B ones).
As more of these founders move to the VC (or business angel) side, investors will increase their risk appetite and will back companies that have a higher degree of uncertainty associated with them, and which can also provide much higher exits and returns to LPs. It’s not a coincidence that the launch of Leadwind has happened after several key hires at K Fund, because only if you’ve built -or worked- at those types of companies you can understand, invest and help them.
My colleague Arrola said it best in this tweet from a few weeks ago.
A clear example of this increased appetite for risk on the investor side is Iñaki Berenguer, co-founder of Coverwallet (acquired by AON), who has a vast portfolio as a business angel and who we had as a guest at an internal event a few weeks ago in Madrid. Iñaki has several investments in deeptech companies, or, as he put it, those in which part of the defensibility is the technical depth of their products.
“As an investor, at the time of your investment you don’t want there to be scientific risk (or for it to be as small as possible), although the startup might have a product with technical depth and a strong science component. You want there to be scientific de-risk. At that point, the risk should mostly be on the business and commercial side (pricing, distribution, productization, narrative, CAC, own brand vs. white label, etc)”, he said.
For a long time we’ve asked ourselves what we could bring to the table to potential portfolio companies, what could differentiate us from experienced and international VC firms from the US and Europe, besides being geographically closer to the startups and understanding certain markets better.
Until recently, and with a few exceptions, we could not speak about having a lot of in-house experience to not just identify, but most importantly understand and help scientific, software-driven and deeptech organizations.
We’re now in the process of building that expertise (we’re not the only ones and more will come), and the fact that the Spanish VC landscape is maturing rapidly is one of the best things that has happened to the local tech sector in recent times.
We can’t wait to invest in companies building the tech infrastructure, tools and API-first services that enable new businesses, interfaces and experiences to be created by entrepreneurs in Latam and Southern Europe.
There’s still a lot more to do and the goal post is always moving. But those building and financing those goal posts are more sophisticated than ever before.
In the image above, Jaime taking a nap while Miguel Arias explains something interesting and Iñaki Berenguer shows excitement
If you’ve been somehow involved in the evolution of the Spanish startup sector, you’ve probably often heard that what the country needs to expand -and improve- its ecosystem is more second (and third) time entrepreneurs (good read on the topic), more senior employees with experience scaling companies that have taken them to the next level, more distribution of wealth through stock options, etc etc.
A lot of these arguments tend to fall on the shoulders of entrepreneurs and employees of tech companies, but I think there’s another way of looking at it.
Spain does need all of the above, but one key ingredient -perhaps even more important than those aforementioned- that’s often overlooked is the need for the Spanish investor landscape to mature and become more sophisticated, engineering-driven and technical.
When I think about the development of the Spanish VC landscape I tend to think of it in layers or generations.
The first few local VC firms were created right after the dotcom bubble, between 2000 and 2005, and on many occasions those behind such companies came from a consulting or financial services background. I tend to think of these firms as the first generation of Spanish venture capitalists.
The second generation would be firms launched in 2010 - 2015, led by former Internet entrepreneurs that saw success with their previous companies. We’re an example of this, as Iñaki Arrola built and sold coches.com to Santander, and so is Samaipata, which Jose del Barrio created after selling La Nevera Roja (food delivery) to Rocket Internet.
There are more examples of this, but one common denominator is that the prior successes of these entrepreneurs were in sectors such as ecommerce and marketplaces, which most of the time don’t have in software and engineering their main differentiating factors.
The third generation of investors, whether it’s new firms, existing ones expanding their teams and business angels, will come from entrepreneurs-and-operators-turned-investors who have built and scaled software-driven startups (most likely B2B ones).
As more of these founders move to the VC (or business angel) side, investors will increase their risk appetite and will back companies that have a higher degree of uncertainty associated with them, and which can also provide much higher exits and returns to LPs. It’s not a coincidence that the launch of Leadwind has happened after several key hires at K Fund, because only if you’ve built -or worked- at those types of companies you can understand, invest and help them.
My colleague Arrola said it best in this tweet from a few weeks ago.
A clear example of this increased appetite for risk on the investor side is Iñaki Berenguer, co-founder of Coverwallet (acquired by AON), who has a vast portfolio as a business angel and who we had as a guest at an internal event a few weeks ago in Madrid. Iñaki has several investments in deeptech companies, or, as he put it, those in which part of the defensibility is the technical depth of their products.
“As an investor, at the time of your investment you don’t want there to be scientific risk (or for it to be as small as possible), although the startup might have a product with technical depth and a strong science component. You want there to be scientific de-risk. At that point, the risk should mostly be on the business and commercial side (pricing, distribution, productization, narrative, CAC, own brand vs. white label, etc)”, he said.
For a long time we’ve asked ourselves what we could bring to the table to potential portfolio companies, what could differentiate us from experienced and international VC firms from the US and Europe, besides being geographically closer to the startups and understanding certain markets better.
Until recently, and with a few exceptions, we could not speak about having a lot of in-house experience to not just identify, but most importantly understand and help scientific, software-driven and deeptech organizations.
We’re now in the process of building that expertise (we’re not the only ones and more will come), and the fact that the Spanish VC landscape is maturing rapidly is one of the best things that has happened to the local tech sector in recent times.
We can’t wait to invest in companies building the tech infrastructure, tools and API-first services that enable new businesses, interfaces and experiences to be created by entrepreneurs in Latam and Southern Europe.
There’s still a lot more to do and the goal post is always moving. But those building and financing those goal posts are more sophisticated than ever before.
