Investments in Startups in Spain March 2015

º

STATE OF IT INVESTMENT IN SPAIN
March 2015 (Q1)
Venture Watch Research
Madrid, March 2015
http://venture.watch
team@venture.watch

© 2015 http://venture.watch The State of IT investment in Spain – Mar 2015 2

Authors: Alejandro Pérez, Alejandro Barrera, Jen Allerson
Madrid, March 2015
Press42 Copyright © 2015

Index

INDEX
.........................................................................................................................................................
3

PREFACE
...................................................................................................................................................
4

METHODOLOGY
......................................................................................................................................
5

MARCH
2015
...........................................................................................................................................
6

Q1
2015
...................................................................................................................................................
11

OPERATIONS
BY
INDUSTRY
SECTOR
....................................................................................................................
12

INVESTMENT
TYPOLOGY
AND
ORIGINS
...............................................................................................................
14

TOP
15
IT
ROUNDS
IN
Q1
2015
.........................................................................................................................
17

TOP
VCS
BY
IT
OPERATIONS
................................................................................................................................
21

SUGGESTED
STARTUPS
......................................................................................................................
22

TRENDS
AND
CONCLUSIONS
............................................................................................................
30


Preface
PRESS42.COM TEAM

Venture Watch Research is a joint venture between Press42 and Brandexit. Our goal
is to keep regular tabs on venture activity in countries across Europe and to
facilitate investment in local-ecosystems.
Currently we’re focused on the Spanish IT ecosystem. The VC ecosystem in this
region is expanding rapidly and many European investors are looking to Southern
Europe for new deals.
We focus on nearly all types of IT deals excluding Biotechnology (Biotech), Green
technology (Greentech), Nano technology (Nanotech), Pharmatheutical innovation
(Pharma) or industrial technology sectors. We may add them in the future, but for
now we’ve decided to stay focused on tech deals that are traditionally harder to
track.

Methodology

These reports are generated with an automated tracking system developed by
Press42. We currently only track published deals on the IT space in Spain.
The data in the report should be taken as an approximation. In some cases, deals
are not made public and are not published, so our tracker can’t catch them. In other
cases, the round is known but the total investment hasn’t been released, so we’ll
count the operation, but we can’t compute the total investment.
We’re continually revising the data and we’re open to input on any rounds we’ve
missed or other information that’s relevant. The numbers are always true, to the
best of our knowledge, but statistics may vary if we’ve updated old deals or added
new ones. Found something we’ve missed? Drop us a note at team@venture.watch
Once again, keep in mind that the data is always evolving. Thus, the ballpark figure
will be reliable but there may be discrepancies on a granular level. Please use at
your own risk.

March 2015
March has been a good month this year. After the hiatus in February, the activity
has picked up again, being driven by two big rounds.

As we see on the previous chart, while last March maintained a pretty constant
profile, in 2015 we’re seeing a clear increase in the activity with two big rounds in
Week 9 and Week 13.


One of the most striking differences this year is the relentless growth of equity
crowdfunding. March saw the largest round in that space ever recorded in Spain.
Surprisingly, it’s been driven by a media company, something that rarely happens.

Both deals and investment volume have increased considerably (+140%) with
respect to March 2014. Despite the two big rounds, the median round is slowly but
consistently growing with respect from last year (~800.000 euros).
While February was a slow month with various industries getting some investment,
March is dominated, once again, by investment in FinTech.
It’s also important to point out El Español which set a record with the largest equity
crowdfunding round ever done in Spain, led, not surprisingly, by the founder of the
publication, the all mighty Pedro J. Ramirez, former founder and President of
Unidad Editorial, the largest media group in Spain.

Q1 2015

The first quarter of 2015 has been an impressive. Momentum from previous years
continues today with a healthy activity both in terms of total investment volume
and number of deals.
While February is naturally a slow month, March activity has picked up with the
most deals of the year so far.


The accumulated chart shows a nice exponential growth, which we expect to
continue through out the year.
Operations by industry sector


One of the most interesting changes in this first quarter of 2015 is the industry
fragmentation. FinTech keeps positioning itself as the sexiest industry in recent
months, while Ecommerce, the one omnipresent industry in Spain, takes second
stage.
While last year there were several industries clearly leading the pack, this year we
see a clear departure from that trend, with multiple industries receiving equal
investments and a long tail (34.8% of other industries in 2015 vs. 7.1% of other
industries in 2014).


While last year had a more balanced investment distribution, when it comes to
volume invested, this first quarter is clearly polarizing and leaning towards FinTech
and Ecommerce, marking the maturity of both spaces.
Investment typology and origins


As in the previous year, Venture Capital is the major force driving investment in
Spain. Nevertheless, business angels have also been active this quarter. It’s also
interesting to note the appearance of equity crowdfunding investments so early on.
In 2014, equity crowdfunding accounted for 1.4% of the total investment recorded,
but this year, it already accounts for 1.6%, which is impressive, especially if we
remember the legislation problems that kind of investment is having in Spain.

We saw big changes in the origin of funds this quarter. United States position
themselves as the number one investor by volume size, mainly due to their massive
Wallapop 36 million euros round. The United Kingdom emerged as the second
largest, with nearly 5% more investment than Spanish investors.
Also, several countries from outside of Europe, like Japan, Singapore and Dubai,
invested, indicating the trend of investment from the MENA region we started
seeing last year is likely to continue.

Top 15 IT rounds in Q1 2015
The top rounds for this quarter are clearly dominated by the ever-present
Ecommerce and FinTech. The industry is growing and attracting larger rounds,
which drove the investment during this quarter.

The general tendency for this quarter is quite different. Last year we saw
logarithmic growth, while this quarter we’re experimenting a marked exponential
growth.
Many sources are already talking about another technology bubble. Nevertheless,
all meaningful metrics (p/e, IPOs, revenues, etc.) are quite different from the 2001
bubble. That said, the change in the tendency of the investment curve could be a
warning indicator if taken alone. The previous chart shows how both deals and

investment value grow at similar speed. Clear deviations of these tendencies might
indicate something worse.

The monthly mean and median is substantially higher this quarter (152% and 123%
respectively), but as the standard deviation shows (287% higher), this is mostly due
to abnormally sporadic high deals like Wallapop, PeerTransfer or Digital Origin’s
ones.


There is a clear increase of both the monthly median and mean investment month-
over-month with an even difference of +250.000 euros, which is good news with
respect to last year.


Top VCs by IT operations

We saw a very impressive first quarter with the usual suspects at the top of the
board. Caixa Capital Risc is tied with Kibo Ventures, Cabiedes & Partners and Sitka
Capital. Interestingly, Caixa had a slower quarter than usual. We expect the
slowdown is temporary and due to work surrounding their new ICT funds, which
we’re expecting to go live very soon.
FIDES (Fundación Jose Manuel Entrecanales) and Inveready showed strong growth,
whereas Civeta Investment which had a very active 2014, showed a slowdown,
perhaps depleting their funds for 2015.
Other funds with one operation during this first quarter include Axon Partners
Group, Startcaps Ventures and big names like Accel Partners and Spark Capital.

Suggested startups

The following section is devoted to select a list of interesting startups to watch
during the next months. Some are early-stage, others are a lot more mature.
We haven’t performed any formal due diligence, so be advise that the companies on
following list should be treated as suggestions and not validated investment
opportunities.
1. Datosphera (Data)
Url: http://datosphera.com/

About: The Barcelona-based company helps entrepreneurs and VCs validate
information on their idea or potential competitors. It resembles CB Insights or
Mattermark. The race is on!

Investments: The company, founded in 2014, has been incubated at Incubio and is
currently attending the Spain Tech Center Immersion program in San Francisco, US.
They haven't raised any funds to date.
2. iContainers (Logistics)
Url: http://www.icontainers.com/

About: One of those startups that you would never envision but when you know of
them you realize how awesome their service is. iContainers allows anyone on the
Internet to send or receive merchandise through boat containers, removing the
hassle of being an export/import expert.
Investments: The company has raised a big Series A round of 1.3 million euros from
Vitamina K and Kibo Ventures. Previous to this round, they've had two other seed
rounds amounting to 550.000 euros.

3. Infantium (Education)
Url: https://infantium.com/es/

About: Despite their confusing web, they're a cognitive platform for children that
analyzes the behavior of kids with digital contents and based on that recommends
additional content that is tailored to their brain needs. Their first product is
Weshare, in partnership with Telefonica.
Investments: The Barcelona-based startups has raised around 500.000 euros mainly
from Wayra and some other partners like 101 Startups or several business angels.
Currently they've been visiting Boston with Dat Venture to work with their US
partners like MIT (As they've also been awarded the MIT TR35 price).

4. Mobincube (Development)
Url: http://www.mobincube.com/es/

About: Mobincube is one of the most successful native app builders out there. They
allow for multiple app templates and a high degree of configuration, payments
included.
Investments: Mobincube is an interesting case of a startup raising a 300.000 euros
round through equity crowdfunding and then going on to raise an additional
700.000 euros with top VCs like Inveready and Bankinter. Although they're based in
Valencia, they currently have presence in Silicon Valley too.

5. PeekMed (eHealth)
Url: http://www.peekmed.com/

About: PeekMed is a Portuguese startup that creates a 3D software model of your
medical CT scans so doctors can better assist patients. The upgrade from current
technology in this space is enormous, both in image resolution and money.
Investments: So far the company is being incubated at Startup Braga in Portugal
and hasn't received any investment but is definitely a great example of amazing
startups appearing in the eHealth space with deep ties to the industry.

6. Sunn 4i (Data)
Url: http://www.sunn4i.com/landing

About: SUNN is a technology scouting platform, or essentially a place to find both
startups in a specific innovation field, as well as research groups, companies looking
for things in such spaces, etc.
Investments: SUNN is a spin-off from 4i, an already established innovation
company. So far they haven't raised any money, but they're already operating at an
international level with their AI innovation platform Sunn.

7. UptoDown (Marketing)
Url: http://en.uptodown.com/

About: The incredible story of two guys from Malaga who built a software catalog
that in 2013 became the third most popular in the world. They receive more than
60 million visitors per month and growing.
Investments: As far as we can tell, the company has never raised a private round
and was already making 1.5 million euros in 2013, probably beating that mark in
2014. They're currently in Boston with Dat Ventures partnering up with local
players like MIT or Northeastern University.


8. Zhilabs (Data / Telecommunications)
Url: http://www.zhilabs.com/new_z/

About: Zhilabs is probably the oldest startup of the bunch but with good reason.
They help Telco companies and mobile operators analyze their traffic data to locate
problems in their network, both with data or voice over IP services. Even for big
companies that have plenty of data, have a hard time extracting actionable business
insights, Zhilabs does this for them.
Investments: Zhilabs was founded in 2008 and has received an undisclosed round
by our friends from Bullnet capital. Since then, they've been growing and have
recently opened an office in Brazil to keep up with their international expansion.


Trends and conclusions

The first quarter of 2015 hasn’t disappointed. We saw strong growth in all metrics
with consistent increases of around 60%.
January proved to be especially prolific for Business Angels, while February is,
historically, a slow month. During March we saw a comeback of the VCs with big
operations and plenty of money invested.
In terms of industries, as predicted, FinTech has been growing strong, while
Ecommerce maintains its ground with the massive Wallapop investment. It’s
interesting to note how polarized investment in specific industries has been
compared to last year’s rounds spread out across multiple industries.
We’re also seeing the first trends of new foreign investors eyeing Spain as a
potential market. Among them, MENA stands out with significant funds from Dubai
and Abu Dhabi.
Overall, it’s a great start to 2015. We’ll be keeping an eye on the bubble warnings
which we do believe should be taken seriously, but the metrics aren’t that crazy
(yet).
PRESS42.COM TEAM
team@venture.watch

Investments in Startups in Spain March 2015

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