Spanish venture capital grows by 41% in number of deals

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BY : Diego GutiérrezSeptember Thu, 2013

venture capital isAccording to webcapitalriesgIn the first half of 2013, the number of investment operations increased by 41% to 468 operations. Despite this, the volume invested fell by 10% compared to the same half of 2012 with a total of €92.3MM.

The average amount of investments has fallen considerably.

VC investment accounted for 17.7% of all VC investment in Spain and 81.8% of the number of deals in the first half of 2013.Domestic and international VC funds operating in Spain invested €62.3 million in the first half of 2013, down 22.7% from the same period in 2012. However, the number of deals increased by 16.2% to 179, with an increase of 32% in new investments (95).

"The average amount of investments has decreased significantly given the reduction in investment and the increase in the number of operations. In our opinion, this is due to the fact that public funding is following the criterion of distributing more but smaller amounts per company. It should be borne in mind that public funding (CDTI and ENISA) accounts for 40% of the total. This drop is also due to the growing role of accelerators, which now account for 21%, increasing their share. These players tend to enter with lower amounts but also at earlier stages", analyses Diego Gutierrez, a corporate finance expert from ABRA INVEST.

Catalonia leads a geographically unbalanced landscape

The Information Technology sector stood out from the rest, accumulating an investment of €22.7 million (36.41 ptas3T of the total), spread over 85 operations (47.51 ptas3T), followed by the Biotechnology/Genetics sector, with €10.8 million and 26 operations.

Catalonia attracted €24.8 million in VC investment, representing 44.3% of the total, in 67 deals (40.1%), while the Madrid region attracted €9.7 million (17.3%) in 23 deals (13.8%). "Investment in Catalonia appears to be unbalanced, the role of Madrid or other regions such as the Basque Country is small compared to their weight in the economy as a whole. Also noteworthy is the growing role of disadvantaged regions such as Extremadura, with six operations led by the public fund Sociedad de Fomento Industrial de Extremadura," said Diego Gutierrez.

A market is beginning to develop for sale of companies VC-anchored

The volume at cost of divestments amounted to €63.5 million in the first half of 2013, an increase of 34.2%, while the number of divestments increased by 40.3% to 108 (79 final and 29 partial). The average length of time the investing firm spent on its final divestments was 6.4 years. The 66% of the number of permanent divestitures meant the total loss of the investment from 24 to 52 in the last year. On the other hand, 16 sales to third parties were recorded, 10 more than in mid-2012. Among the sales to third parties were the sale of Telemedicine Clinic to Salina International and the sale of Niumba to the US group Tripadvisor.

"Spain needs to create a bigger Venture Capital funding market with more players. To do this we need success stories in the sale of companies so that more and more investors choose to enter the market," advises Diego Gutierrez.

The full report can be accessed free of charge at the link 

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