Welcome to our first Local Deep Dive newsletter, introducing the Iberia region! 😎
🇪🇸 🇵🇹 After baby vc’s expansion announcement to the Southern European countries, it only seemed right to learn a bit more about them and the story of their ecosystems.
Over the next 4 weeks, join us as we explore the growing markets of Iberia, diving into the past and future of venture capital and entrepreneurship in the region. 🔍
The entire Iberia team is at your disposal. Enjoy these lines and feel free to reach out with any questions, concerns, interesting facts! 🚀
🕰️ Until Now
Spain and Portugal feature promising VC ecosystems, capturing international attention and drawing increased interest from overseas investors with their notable success stories. The VC ecosystems in these geographies have demonstrated higher sustained levels of investments in the recent years, and are now set on a comparable growth path as other European nations. 📈
In this edition, we’ll dive into how these countries got here and are constantly growing to new and unprecedented numbers.
🇪🇸 Introducing Spain
🚀 Entrepreneurship
Startups in Spain are not only stepping into the tech ecosystem with innovative solutions, but ever growing since the past few years. The combined enterprise value of Spain startups is worth €93B in 2023, growing 3.6 times since 2018. 💰
2023 Spain Ecosystem Report explains it well when looking at the four new homegrown unicorns just from last year: Factorial, Fever, Domestika and TravelPerk.
Factorial is one of the leading HR software for SMEs. They provide intuitive solutions that automate and centralise administrative tasks to help HR practices run smoothly.
In Tech Event, Fever is the global live-entertainment discovery tech platform with a clear mission: to democratise access to culture and entertainment.
Domestika is the creative community where creative experts share their knowledge and skills through professionally produced online courses.
Finally, TravelPerk is a SaaS business travel all-in-one platform and a pioneer in the future of business travel. It gives travelers the freedom they want whilst providing companies with the control they need.
Spain currently has 14 unicorns in the region, including Glovo, eDreams, Cabify, Idealista and others; at the same time, it is also seeing new rising stars in its most active regions. 👇
Spain has also stepped up in the last few years from a regulatory perspective, with the so-called Startup Law. As a result, Spain is becoming an important player in the tech ecosystem, ramping up the European ranking of Unicorns. 🦄
💎 VC Investors
The investment side of the story is growing as well in Spain, placing 6th in Europe and 16th globally for total investment raised in 2022. In fact, Spain showed stronger resilience than its global counterparts, with VC Investment dropping only 15% since 2021!v🙌
At a simple glaze, the ecosystem is the following:
baby vc is looking forward to collaborating with most of these best players:
KFund is a multi-stage, multi-product family of funds supporting entrepreneurs across Southern Europe and Latam. With more than €500m assets under management (AuM), they invest from pre-seed to Series B and write cheques between €100k to €10m.
Kibo Ventures is an early stage VC firm with over €350m in AuM across five funds, investing in enterprise software and digital consumer.
Adara Ventures focuses on early-stage companies with a European focus and invest in B2B opportunities in: cybersecurity, data and applications, infrastructure, dev-ops, digital health and energy.
JME is a venture capital firm focused on making investments in early-stage technology startups, with a investment strategy revolving around Spanish entrepreneurs.
🇵🇹 Introducing Portugal
🚀 Entrepreneurship
Lisbon has proven to be a fertile ground for successful startup stories. The combined enterprise value of HQʼed and founded startups has grown 27x since 2016 (Dealroom 2022 Report). 👀
This number is explained just like in Spain by the Unicorns startups of the country, but with a small difference: in Portugal, relocated companies contribute to over 90% of the value creation, with 87% of total EV corresponds to Outsystems and Talkdesk only (both unicorns founded in Lisbon but HQ’ed abroad).🦄
Lisbon has fostered a strong pipeline of successful and promising companies:
Among their Unicorns, two software companies:
Outsystem is a a high-performance low-code platform that enables organisations of all sizes to tackle any kind of critical application - from customer apps and portals to internal business apps and core systems.
TalkDesk is a global cloud contact center for enterprises of all sizes. Their CX Cloud and Industry Experience Clouds help enterprises deliver modern customer service their way, leveraging on AI and automation.
On top of this, Lisbonʼs universities are fostering the next generation of entrepreneurial talent. Alumni of Universidade de Lisboa, Universidade Nova and Universidade Catolica have founded the vast majority of the most recognized startups. 🎓
💎 VC Investors
Portugal’s scene is even better in terms of investment volume. €333M were raised in 2022; 3.2x more than 2021, which already set a new record for VC investment in Lisbon-based startups! 💰
On top of this, 94% of total funding was raised by startups HQʼed in Lisbon, which is an important data for the country’s leading hub in terms of growth and innovation.
In addition, interest in Portuguese startups is attracting foreign investment, with numerous players investing in Lisbon-based startups :
At baby vc, we are in contact with most of these funds and are excited to introduce them to you:
Bynd Vc is a leading Iberian Venture Capital firm, established in 2010, focusing on seed and early-stage technology companies. With a portfolio of over 50 investments across various sectors, Bynd VC supports companies with connections to Portugal and/or Spain.
Shilling VC specializes in early-stage investments, typically ranging from €100K to €1M and has a notable presence in Portugal. Operating on a profit-sharing model, they emphasize mutual growth and success through their platform, and sharing profits with portfolio founders.
Armilar Venture Partners is Portugal's leading venture capital firm, specializing in deep-tech investments across ICT, HealthTech, and CleanTech sectors. With a focus on early-stage technology-based companies, Armilar manages about €260 million across five funds, engaging primarily in Portugal, Europe, and the USA
Faber VC is a Lisbon-based venture capital firm, with a strong focus on early-stage B2B and deep-tech startups. They are dedicated to driving digital transformation and climate action, particularly through AI/Data and ocean technologies. Faber VC provides initial investments ranging from €100K to €2M, targeting startups with scalable solutions and a global footprint, preferably with a presence in Southern Europe
Growing the local VC communities and educating students on the matter has become increasingly vital to sustain future industry development. With its proven track record of excellence in venture capital education, baby vc is coming to Southern Europe in 2024 to uphold this mission. 🔦
We are excited to have you on board!
📧 Our next newsletter will be about outstanding VCs and startups in the Iberian ecosystem, and will feature Pablo Ventura’s insights.
Pablo is the General Partner at K Fund and previous Managing Partner at JME Venture, where he was a Board Member in unicorns Jobandtalent and Flywire. We could not think of a better person to help us understand how the Iberian scene established itself, and how it’s looking for the coming future.
Have a fantastic week ahead, and see you next Sunday! 😏
Chiara, Paula, Jorge, & Justine 💛