SMEs: a priority target for Venture Capital in Spain

Integral service around a transaction
BY : Diego GutiérrezMay Thu, 2013

200345858-001According to the 2012 report of the Spanish Venture Capital Association (ASCRI), the Spanish venture capital market is dominated by small deals in SMEs with an average amount invested of €4.6 billion per deal (151bTP1T less than in 2011).

60% of operations, in SMEs with less than 100 employees.

Of the 543 deals closed in 2012, 451 were targeted at SMEs with less than 100 employees. Of these, 438 (97%) were led by domestic ECRs, as the international investor, for the most part, is oriented towards larger transactions in consolidated companies.

"It would be useful to analyse the sector separately between large deals (>€100bn) and the rest. The first group represents only 1.31GTP1T and has been dominated by international funds. They can be counted on the fingers of one hand, there have been 6 deals: Advent International in Maxam, Bain Capital in Atento, Bridgepoint in Borawind, Doughty Hanson in USP Hospitales, Trilantic and Investindustrial in Euskaltel and Investindustrial in Portaventura", comments Diego Gutierrez (ABRA INVEST)specialist in corporate finance in SMEs.

Smaller and smaller operations: 72% less than €1 billion.

Venture Capital activity in Spain, mainly focused on SME financing, means that the size of the operations carried out by the sector is normally small. Of the 543 transactions accounted for, almost half (49%) were for less than 250,000 euros. 721 PTY1T received less than EUR 1 million, 21.71 PTY1T between EUR 1 and 10 million, 2.91 PTY1T between EUR 10 and 25 million and 21 PTY1T between EUR 25 and 100 million. The remaining 1.31T% were transactions in excess of EUR 100 million.

"It is encouraging that financing is being directed towards SMEs and growth companies. We have to take into account that the business fabric in Spain is mainly composed of SMEs that need, more than ever, new capital injections to cover new markets, gain size by integrating with other companies, or other growth processes", says Diego Gutierrez Zarza.
The average amount invested per company fell to €4.6 million per transaction (in 2011 the average was €5.4 million), a 15% year-on-year decline.

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