Welcome to our second Local Deep Dive newsletter! 👏
🇪🇸 🇵🇹 After the kick-off of our program and some notes about Iberia’s ecosystem, we’ve had the pleasure of speaking with Pablo Ventura.
Pablo is the Director of Investments at Kfund. He has leveraged a significant portion of his career in the Venture Capital sector as the Managing Director of the José Manuel Entrecanales Foundation and JME Ventures. Pablo has spearheaded over 50 transactions across 25 startups, holding Board Member positions in companies such as Billin, Jobandtalent, Flywire, Redbooth, and Lucera. 💪
Join us in these lines as we share what we have learnt about how VC started in Spain!🚀
🏔️ A brief introduction
The early days of Spanish VC had a few relevant profiles that set the foundations to what we see today, one of them being José Manuel Entrecanales, a visionary businessman who wanted to help fellows in the business ecosystem build their ideas into a reality. José Manuel created an NGO with this purpose.
The José Manuel Entrecanales Foundation for Innovation in Sustainability was established in October 2009. It had the dual mission of promoting innovative business initiatives for sustainable economic development and fostering a culture of sustainability in society. In its role as a business incubator, it aimed to boost entrepreneurial spirit and sustainability commitment. 🙌
Throughout its journey, the Foundation endeavoured to elevate Spain's contribution to global challenges such as demographic pressure, environmental deterioration, and imbalances in wealth distribution. In this context, it prioritized support for the Spanish business fabric in sustainable innovation, attracting private capital through the FIDES investment group, formed by prominent entrepreneurs.
Additionally, the Foundation was committed to promoting a culture of sustainability. It sought to incorporate sustainable concepts from early educational levels and raise awareness in groups with long-term impact.🌱
This is now common. But back in 2009, it was completely out of the box!
Pablo Ventura was very present in these early days of Spanish VC as well as he worked closely with José Manuel in building and growing the JME Foundation. 🙏
💬 Conversations with Pablo Ventura
Pablo and the JME Foundation
Pablo is a mechanical engineer who has never worked as such. His energetic personality and desire to change things led him to give up safer bets to join an NGO that Accionas’s President was launching to help entrepreneurs. This NGO was JME Foundation. ✨
In Spain, at the time, the word “entrepreneur” was not even used. At the JME Foundation, they were committed to helping people create businesses from scratch. At some point of the process, the help these entrepreneurs needed was money. Under this NGO ambition, a c. €16m VC fund was created to cover this need. Pablo led its investment face for seven years, witnessing great transformations in the ecosystem.💸
Some key investments of this first JME fund were Flyware and Job&Talent:
💎 Flywire
Flywire, the payment company originally from Valencia, became one of the few Spanish-origin unicorns in February when it received a $120 million investment from Goldman Sachs. Initially focused on facilitating international payments for students going to the U.S., Flywire has evolved to serve various sectors, managing over $16 billion in transactions for 2,000+ clients. 🌐
The company, initially valued at over $1 billion, expanded from universities to hospitals, streamlining payment processes globally. Looking ahead, Flywire aims to explore new verticals, with a focus on luxury tourism's potential recovery post-pandemic.🔍
The company is one of the few Spanish unicorns, attributing its success to an early global perspective and dedication to customer service. Flywire, currently valued at over $3.5 billion, continues to expand its reach beyond education and healthcare, considering sectors with high-value transactions and global dispersion.🦄
💎 Job&Talent
Job&Talent is an employment platform founded in 2009 by Juan Urdiales and Felipe Navío. It operates as a digital marketplace that connects job seekers with temporary or part-time job opportunities offered by various companies. The platform utilizes technology to streamline the hiring process, matching candidates with relevant job openings based on their skills, experience, and preferences. It offers a user-friendly interface for both job seekers and employers, providing a more efficient and flexible approach to staffing. 🗝
Job&Talent achieved unicorn status, which refers to privately held startup companies valued at over $1 billion. The unicorn status indicates that Job&Talent has experienced rapid growth and has garnered a high valuation in the competitive job marketplace. The platform's success can be attributed to its ability to adapt to changing market conditions, efficiently address labor shortages, and expand internationally. 🚀
With a strong presence in key markets like the United States, the platform has demonstrated its capacity to meet the demands of both job seekers and companies, contributing to its remarkable valuation and unicorn status in the startup ecosystem.🦄
Circling back to Pablo, after his time at JME, before staying for another 5 years, Pablo decided to leave and join Kfund in which at the time Iñaki Arrola and Carina Szpilka were setting up their first fund.
An Overview of the Spanish ecosystem
According to what we have come to know, the venture capital landscape in Spain offers a distinctive profile. Unlike more saturated markets, the VC sector here is comparatively less saturated, presenting a nuanced blend of opportunities and challenges. 👀
As an important remark, the process of establishing a fund in Spain proves intricate due to regulatory complexities, funding limitations, and the nuanced navigation required for CNMV (Comisión Nacional del Mercado de Valores) regulations governing the creation of a managing company. Locally, the presence of fewer VC players is discernible, attributed in part to the regulatory and financial intricacies. However, this scarcity of local competitors is juxtaposed with an influx of competition from international entities, emphasizing the delicate balance and evolving dynamics within the Spanish venture capital landscape. ⚖️
According to Miguel Arias, GP at KFund:
After series A, 68% of growth funding comes from abroad and as a result, more than 20% of scale ups in the region move their headquarters to other markets when they scale. This leads to loss of local wealth and job creation that could be captured.
To keep in mind
When approaching the VC world
Thorough Investment Analysis: Understanding the core concept, market dynamics, and scalability potential is crucial in venture capital.
A good company vs. a good investment: Flawless companies may not always be the best investments; opportunities for growth often lie in outliers.
Unconventional Paths to Success: Successful entrepreneurs may come from unexpected, less structured backgrounds, bringing valuable experience and tenacity.
Foresight Over Trends: Investment decisions should not be solely driven by trends; identifying emerging opportunities is key to avoid overpaying for trendy opportunities.
Emotional Resilience: In the fast-paced VC world, being adaptable to market changes and drawing from experience is essential for confident decision-making.
Bringing something to the table: Academic credentials alone are insufficient in the competitive VC landscape; to become a key player in the ecosystem it is important to bring a distinctive contribution to the fund. A good way to achieve this competitive advantage might be to be an entrepreneur before becoming an investor, but there are no general rules.
📧 Our next email will continue this deep dive into the Iberian VC and startup ecosystem, based on a conversation with Alberto Gómez.
Alberto is the is a co-founder and current managing partner of Adara Ventures.
Alberto has a extensive professional background, having worked in major companies such as Telefónica, where he led the Venture Capital division of the telecommunications giant, and served as Executive Director at the investment banks Merrill Lynch and Morgan Stanley. He has also held the position of CFO at Atento Group (a subsidiary of Telefónica) and worked as an associate at Mc Kinsey & Co. and Booz, Allen & Hamilton.
Join us next week for more! ✨
Chiara, Paula, Jorge, & Justine 💛