SURVEY Venture Capital & Private Equity Activity in Spain

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K SURVEY Venture Capital & Private Equity activity in Spain

Príncipe de Vergara, 55 4º D • 28006 Madrid tel. (34) 91 411 96 17 • www.ascri.org

SURVEY Venture Capital & Private Equity activity in Spain 2020

Venture Capital & Private Equity: WITH THE SPONSORSHIP responsible investment OF: for a sustainable future Survey 2020 Venture Capital & Private Equity in Spain

Sponsor by: 2

THIS REPORT HAS BEEN PREPARED BY Ángela Alférez (ASCRI Research Director).

Data obtained with collected in collaboration José Martí Pellón (Professor of Financial Economics at the Complutense University of Madrid) and Marcos Salas de la Hera (Partner of webcapitalriesgo).

All Rights Reserved ASCRI ® 2020 The total or partial reproduction of the document, or its computer treatment, is not allowed transmission in any way or by any means, whether electronic, by photocopy, by registration or other methods, without prior and written permission of the copyright holder. 3

The Spanish Venture Capital & Private Equity Associ- ation (ASCRI) is the industry body that units and represents the sector to the authorities, Government, - in stitutions, investors, entrepreneurs and media. ASCRI regularly communicates and provides statistics and -up dated information regarding the developments of the tax and legal framework. ASCRI also organizes a range of activities (training courses, events and round tables) for the members and general public in order to disseminate and reinforce the contribution of the Venture Capital & Private Equity industry for the economy and growth of SMEs in Spain.

ASCRI comprises almost 139 national and international Venture Capital & Private Equity firms, 14 limited partners and over 77 service providers, spreading and ensuring the professional standards among its members: transparency, good governance and best practice. 4 Index Survey 2020 5 Index

ASCRI Chairman and Managing Director's letter 7

Summary of 2019 9

Fundraising 14

Investment in Private Equity & Venture Capital 18

Middle Market Investments 23

Large Market. The International GP in Spain 26

Venture Capital 29

Divestment 34

Portfolio 36

2019 Main Transactions 38

Statistical appendix 44

Challenges and opportunitiesin the Venture Capital 60 and Private Equity Legal Landscape

General Partners included in this survery 64 6 7 ASCRI Chairman and Managing Director's letter

he last few months have revolutionized worldwide companies to respond to the shortage of sanitary or food economic activity. The COVID-19 crisis has supplies, among others. As a key figure for emerging from highlighted the strengths and weaknesses of a system this crisis, we will continue to guarantee the survival of Tthat has suddenly been compelled to undergo significant Spanish companies, responding to their financing needs, transformation in all its respects. The Venture Capital & supporting them in management and contributing to job Private Equity industry will also be affected and, although creation. it will suffer a period of slowdown, we are convinced We are confident that, together with the public sector, that it will recover quickly and capitalize on significant we will overcome this crisis. Our sector has always had a opportunities in the process, such as the application of long-term vision and will make its capital and management innovative technology during the different company stages. capacity available to companies, promoting economic Our sector has proven its ability to emerge stronger from and social progress of the economy as a whole. As an previous financial recessions, in which the focus was placed Association, we will continue to promote a regulatory on investee companies by venture capital and private framework in accordance with that of our neighboring equity managers, ensuring their liquidity and sustainability. countries that encourages domestic Venture Capital and The data in this report shows that Venture Capital and Private Equity general partners to continue developing Private Equity continues to mature and grow in importance their investment activity in companies over the long term, in the Spanish economy. In 2019, an all-time high was in accordance with Environmental, Social and Governance reached in Venture Capital and Private Equity investment (ESG) criteria. for the third consecutive year, by both volume and number We are grateful for the continued support from the of investments. Spanish SMEs were the main recipient of sponsor of this publication, DIANA CAPITAL, and the Venture Capital and Private Equity investments, which Webcapitalriesgo team, which collects and processes benefited a total of 586 companies, 90% of which were the data together with ASCRI through the European EDC SMEs. The difference compared to Europe decreased, with platform. To all of them, many thanks for their time and levels of investment as a percentage of GDP exceeding the dedication. European average for the second consecutive year (0.69% in Spain vs. average 0.53% in Europe). We would also like to thank the more than 400 domestic and international Venture Capital and Private Equity From ASCRI, we affirm the role of venture capital and private firms (VC&PEs) with activity in Spain (of which ASCRI/ equity as part of the solution to the current situation, in Webcapitalriesgo directly monitor more than 200) that the face of which we have reacted with social responsibility have collaborated in the preparation of these sector and solidarity. In this regard, several support initiatives statistics. This report is available for download from our were launched by various managers and their investee website (www.ascri.org) in both English and Spanish.

Aquilino Peña José Zudaire Chairman ASCRI / General Manager of ASCRI Founding Partner Kibo Ventures 230 MEMBERS Who we are?

It comprises more than 139 Spreading and national and international ensuring the Venture Capital & professional standards 1986 Private Equity among its members:

service The Spanish Venture 77 providers Transparency Capital & Private Good governance Equity Association institutional Best practice (ASCRI) was born in 1986 14 investors

ASCRIObjectives Global At ASCRI we have a clear commitment to promote the in- - Participation in international events, such as congresses ternationalASCRI is thearea. industry body that unites and representsor theevents, sector in which to ASCRIthe authorities, has an active presenceGovernment, with the institutions, investors, entrepreneurs and media.ASCRIaim regularly of developing communicates the Spanish Venture and Capital provides and Private To do this, we continue to develop initiatives such as: statistics and updated information regarding the developmentsEquity sector, ofsuch the as IPEMtax and in Cannes, legal the framework. Pacific Alliance, -ASCRI The MoU also or collaboration organizes agreementa range ofwith activities the counterpart (training courses,EVPA Annual events Conference, and round Invest tables) Europe Venturefor the Capital membersassociations and of othergeneral countries, public France in order Invest, to IATI, disseminate IDB / andForum, reinforce Invest Europe the contributioninvestor’s Forum of or the annual con- VentureLAB, Amexcap, Capital ColCapital, & Private Arcap Equityand ACVC, industry with whom for we the economygresses and of the growth associations of SMEs that are in partSpain. of the MoU. are in continuous communication. The MoU continues to expand its members: in 2019, we - LinkedIn site created specifically for the members of the welcomed Brazil (ABVCAP), MoU and that allows exchanging ideas, information, for- Peru (PECAP), Italy (AIFI), Luxembourg (LPEA) and LAVCA, mulating queries and supporting business OdevelopmentNSI BLE INVE SP andS allTM those who in the future will also be part of this between the member countries. RE E G NT ES alliance.

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230 MEMBERS Summary of 2019 Who we are?

It comprises more than 139 Spreading and national and international ensuring the Venture Capital & professional standards 1986 Private Equity among its members:

service The Spanish Venture 77 providers Transparency Capital & Private Good governance Equity Association institutional Best practice (ASCRI) was born in 1986 14 investors

Objectives ASCRI is the industry body that unites and represents the sector to the authorities, Government, institutions, investors, entrepreneurs and media.ASCRI regularly communicates and provides statistics and updated information regarding the developments of the tax and legal framework. ASCRI also organizes a range of activities (training courses, events and round tables) for the members and general public in order to disseminate and reinforce the contribution of the Venture Capital & Private Equity industry for the economy and growth of SMEs in Spain.

ONSIBLE INVE SP STM RE E G NT ES

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LIC CE - N PRIVATE ALLIA 10 Summary of 2019

Record high Private Equity & Middle Market saw record high Venture Capital investment in Spain investment for the third consecutive year Thanks to domestic management companies By both volume and number of investments. that led 53 of the 75 transactions closed this year.

Spanish SMEs were the main recipient of Venture Capital and Venture Capital reached a new Private Equity investment record Investments were made in 586 companies, 431 Spanish start-ups received investments 90% of which were SMEs. totaling €721 million.

Investment is closing the gap with Domestic investors (LPs) were Europe the main source of new capital Exceeding European levels of investment as a for Spanish funds in both Venture percentage of GDP for the second consecutive Capital and Private Equity year (0.69% in Spain vs. 0.53% in Europe). Family offices stood out in their support of Venture Capital and Private Equity as an asset class.

International funds support Spanish companies International GPs contributed 78% of investment Dry powder has maintained similar volume for the year. Record high number of levels to those seen in recent years investments in Spain (137). Approximately €3,901 million in equity available for investment, a long way from the 2008 record high (€6,000 million).

A year of megadeals International funds closed 19 investments above €100 million in equity (record high), representing Record high in volume of funds 67% of total Venture Capital and Private Equity managed investments in Spain. International GPs accounted for 58%. 11

Investment in 2019

+41.8% +2.7% +38% vs, 2018 vs, 2018 vs, 2018

€8,526.9M 760 investments €11.2M Equity investment in 586 companies (90% SMEs) Average investment round size

All-time record investment for the third consecutive year

10000 900 €8,527M 760 8000

600 6000 498

4000 €2,509M 300 2000

0 0 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019

Investment Number of investments

Fundraising in 2019

- 11.8% - 43.7% +336% vs, 2018 vs, 2018 vs, 2018

€1,920.2M Spanish Private Equity & €1,122.5M €797.7M Spanish Private Equity funds Spanish Venture Capital funds Venture Capital Funds

Record high in fundraising of Venture Investment and Capital management companies Fundraising vs. GDP

3000 0.69%

0.50% 2000 €1,920M 0.43% 0.34% 0.25% 0.27% 0.22% 1000 0.20% 0.17% 0.18% €526M 0.23% 0.07% 0.16% 0.22%

0 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019

Fundraising Investment in Spain / GDP (%) Domestic Funds Raised / GDP (%) 12

Divestment in 2019

+45.9% +50.8% +4.6% vs, 2018 vs, 2018 vs, 2018

€2,977.3M €2,754.2M €223.1M Divestment (at price cost) Divestment in Private Equity Divestment in Venture Capital

The sale of large companies boosted divestment

6000 600

5000

4000 374 337 €2,977M 3000 300 €2,064M 2000

1000

0 0 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019

Divestment Number of divestments

The sector in Spain 2019

Portfolio

€172.4M €45.6M €1,179M €454M €760.7M Asturias Cantabria País Vasco La Rioja Navarra

€817.5M €35,229.8M Galicia €6,230.3M 2,627 Cataluña €397.8M €277.1M Castilla y León Aragón Investee Funds under companies management (92% SMEs) (20.554,8 from international funds) €13,255.6M €1,951.1M Cdad, de Madrid Cdad. Valenciana €378.5M €493M Castilla la Extremadura Mancha €1,114.7M 440,424 406 Baleares

Employees National & €877.4M €406.7M (In portfolio companies Intenational GPs Andalucía Murcia based in Spain) (with ongoing activity in Spain ) €55.5M Canarias 13

The sector in Spain 2019

Investment in 2019 (Volume)

€7.2M €1.0M €175.5M €109.9M €116.9M Asturias Cantabria País Vasco La Rioja Navarra

€222.2M Galicia €1,065.5M Cataluña €106.1M €30.9M Castilla y León Aragón

€5,387.1M €784.2M Cdad, de Madrid Cdad, Valenciana €13.9M €38.4M Castilla la Extremadura Mancha €43.7M Baleares

€388.9M €13.9M Andalucía Murcia €21.6M Canarias

Investment in 2019 (number of investments)

13 2 104 4 36 Asturias Cantabria País Vasco La Rioja Navarra

37 Galicia 226 Cataluña 51 9 Castilla y León Aragón

171 53 Cdad, de Madrid Cdad, Valenciana 3 5 Castilla la Extremadura Mancha 14 Baleares

20 8 Andalucía Murcia 4 Canarias 14 Fundraising

undraising1 maintained the levels seen in the good fundraising momentum seen in recent years. A recent years. New funds raised by private Venture much different scenario has developed since the start of Capital and Private Equity firms in Spain in 2019 the COVID-19 crisis, and which will undoubtedly have Fexceeded €1,920.2M2, representing a 11.8% decrease a significant impact on this variable given the current from 2018 (€2,178M), second best figure on record since uncertainty. the recovery of this variable started 6 years ago. Including Approximately 46 Venture Capital & Private Equity firms 3 , total new funds new funds for public entities (€270.8M) ("VC&PEs") headed the raising or extension of funds by raised for the sector reached €2,191.9M (-7.8% from 2018). private domestic firms. A majority of new funds raised This decrease is in response, in part, to the fact that many were again raised for the middle market investment Spanish Private Equity funds have been raised in recent segment. As is the case globally, a significant part of funds years aimed at investing in the Spanish middle market raised are being concentrated in a small number of funds (transactions with capital contributions in companies of (approximately 50% of new funds raised were invested in between €10M - €100M), which has resulted in this type six funds, all of them above €80M). The following Venture of vehicle seeking fewer funds in 2019. Furthermore, large Capital & Private Equity vehicles, inter alia, stood out6: funds raised by relevant global international firms attracted Miura Frutas Fund (€360M) of Miura Private Equity Fund, large sums of money from investors (LPs),4 which ate away Nazca V (first and final closing of €150M) of Nazca Capital at some of the fundraising opportunities for more local, and GED VI España (first fund closing of €175M) of GED lesser-known Private Equity and Venture Capital firms with Iberian Private Equity, as well as the capital extensions for a smaller target fund size. However, despite the positive the companies Torreal and Quarza Inversiones, among data, the amount raised in Spain is still far from that of others. Several funds were launched and closed to finance other neighboring countries such as the United Kingdom startups, including Alma Mundi Insurtech Fund and Alma (€60,878M), which continues to attract more than half of Mundi Fund II of Mundi Ventures, Adara Ventures III total funds raised in , a 10-year high), Europe (€109,345M (final closing of €75M) of Adara Ventures, Sabadell Asabys France (€21,166M), Germany (€5,488.9M) or Sweden Health Innovation Investment SCR (second closing, with (€4,751M)5. a fund target of €75M) of Asabys Partners, Ysios Biofund Fundraising in Spain during 2019 was once again marked III (first closing) of Ysios Capital Partners, Columbus Life by abundant global market liquidity, LP interest in Private Sciences Fund II (first closing, with a fund target of €70M) Equity and Venture Capital as an asset, interest in the of Columbus Venture Partners, Nauta Tech Sidecar Spanish market and the support from the public sector Fund I (closing of €55M) of Nauta Capital VC Partners, Tech through various programs, of which the FOND-ICO Global Transfer Agrifood (first closing of €14M) of Clave Mayor fund of funds stands out. All these factors contributed to and the extension of the All Iron Ventures I and Santander

New funds raised by type of entity (GP)

€ Millions Domestic private entity Domestic public entity Source: ASCRI / webcapitalriesgo

1 The fundraising variable analyzed in this chapter includes all new funds raised by Spanish Private Equity and Venture Capital (PE&VC) firms during the fiscal year analyzed in the report (2019). The target of these funds raised is direct investment in unlisted companies. Infrastructure funds, real estate funds, funds of funds, secondary funds of funds, corporate bond funds and accelerator, incubator and business angel funds are not included in these statistics. 2 All figures in this report are provided in millions of euros (“€M”). 3This category includes the capital extensions provided under the General State Budgets (both national and regional) and managed by public PE&VCs. 4 This chapter includes the following types of investors: Pension funds, financial institutions, family offices, public sector, funds of funds, insurers or corporate investors. 5 Data from "Investing in Europe: Private Equity Activity 2019," published by Invest Europe in May 2020 6 Only those funds that have been disclosed are referred to herein. 15

Innoventures (Banco Santander's corporate venture fund) Globally,8 political and economic uncertainties did not funds, as well as several undisclosed capital extensions in affect investor interest (LPs) in alternative assets, and new Venture Capital & Private Equity vehicles. funds raised in 2019 totaled €550,000M,9 the third best figure on record following 2017 and 2018. As in previous In 2019, total funds raised by private domestic Private years, large funds continue to account for nearly half of all Equity GPs totaled €1,122.5M (€1,995M in 2018), whereas annual fundraising: 45% of funds raised were invested in 20 Venture Capital GPs totaled €797.7M (€182.9M in 2018), of the 1,316 new funds closed. Looking ahead to 2020, and a record high for the managers operating in this segment. before the COVID-19 crisis, 86% of investors (LPs) planned An estimated€3,901.3M in dry powder is currently available to maintain or increase their allocations to Private Equity for investment by private domestic GPs. This represents a and Venture Capital, largely due to the returns they have -12.5% decrease from 2018 due to the intense investment received from this asset. However, given the new COVID-19 7 activity of private domestic managers , placing this figure situation, this percentage is currently unknown. Funds further from the record-high of 2008 (€6,000M). This figure available for investment by Venture Capital & Private highlights the need for ongoing fundraising for the Spanish Equity managers globally have been growing since 2012, market by showing the need for private Venture Capital reaching a record high of €1.4 trillion in 2019. & Private Equity managers to continue to maintain their investment capacity (most of it directed at Spanish SMEs) in the coming years, in addition to the large difference compared to the high volumes recorded internationally, which are reaching record highs.

Investment vs. GDP reaches a record high. The Fundraising and investments as relationship between investment in 2019 as a percentage a percentage of GDP of GDP10 in Spain increased by 19 percentage points . compared to 2018, reaching 0.69%, a record high for this indicator for the third consecutive year, above the European average for the second time (0.53%, according . to Invest Europe). However, this indicator is far from the figures of countries such as the United Kingdom (0.89% of investment as a percentage of GDP) or the Netherlands . (0.83%), leading the European ranking with respect to this variable. In 2019, fundraising vs. GDP fell by 2 points to . 0.18%.

Investment in Spain / GDP (%) National funds collected / GDP (%) Source: INE, ASCRI / webcapitalriesgo

7 Investment volume of private domestic Venture Capital and Private Equity managers in 2019, accounting for investments both in Spain and abroad, totaled €1,860.6M. 8 Data from "2020 Prequin Global Private Equity & Venture Capital Report". 9 The fundraising figure reported by Prequin includes other alternative investments as well as Private Equity and Venture Capital funds, unlike the methodology applied by ASCRI and other European Associations, which solely follow the activity of Private Equity and Venture Capital funds. 10 According to the Spanish National Institute of Statistics (INE), Spain's Gross Domestic Product in 2019 grew by 2% from 2018. 11 "Investing in Europe: Private Equity Activity 2019", published by Invest Europe in May 2020. 16 Fundraising

unds of funds remained the primary public sector,12 including FOND-ICO Global13 (investment investor (LP) in total funds raised by vehicle for VC&PE funds managed by Axis Participaciones domestic private entities. As regards capital Empresariales), with €138.8M, reduced its contributions Fraised by Spanish private VC&PEs, by type of investor from previous years. Pension funds were the fifth largest (LP), funds of funds, and, in particular, Fondo Europeo de contributor, accounting for 6% of total new funds raised. Inversiones (FEI) led new capital contributions for the fifth In this regard, domestic pension funds maintained low consecutive year, accounting for 33.7% of the €1,920.2M participation rates in this asset class, contributing just raised in 2019. These were followed by family offices €14.7M of the €114.6M contributed by this type of which accounted for 29% (€558.4M) of funds contributed. investor in 2019. Thus, the weight of domestic pension Spanish family offices again stood out, contributing €485.6M funds in Spanish VC&PE vehicles is still very far from their compared to the €72.8M contributed by international international peers, with average annual contributions family offices, reflecting the renewed interest in this asset between 15% and 30%14 of total funds raised at the in recent years (in the last four years, Spanish family offices European level. Insurance companies contributed 5.8% of have contributed around 17% of the capital for new funds the total, with domestic insurance companies making the raised). Corporations or non-financial companies were largest contribution totaling €80.3M of the total €111.4M the third largest provider of funds, representing 10.7%. contributed by this type of investor in 2019. Domestic companies also stood out in this category, making Family offices were the main contributor (35.7%) a capital injection of €204M to new funds raised, compared of to €1.2M contributed by international corporations. The new funds raised for Venture Capital vehicles in 2019 (€797.7M), followed by funds of funds (15.3%).

New funds raised by Spanish private VC&PEs in 2019, by type of investor (LP)

. Private Equity Funds Venture Capital Funds

Source: ASCRI / webcapitalriesgo Others agencies Financial investors Insurance managers Corporate Companies Institutions Other asset Government Family office Fund of funds Pension funds

omestic LPs were the main source of Capital and Private Equity vehicles in 2019, by geographic new resources for the Spanish Venture origin Spanish investors stood out, contributing 55.5% Capital & Private Equity sector. In terms of of total funds raised (€1,920.2M). In absolute terms, the Dthe contribution of new funds to private domestic Venture volume invested by domestic LPs grew by 52% compared

12 This category includes public funding aimed at funds raised by domestic private entities. 13 In 2019, Fond-ICO Global contributed €145.0M to VC&PE vehicles. Fond-ICO Global has approved commitments of €1,937M across 93 funds since its launch, through twelve calls. 14 Pension funds led capital contributions with 29% of total funds raised by European VC&PE vehicles in 2019. Source: "European Private Equity Activity 2019," published by Invest Europe in May 2020. 17

to 2018, whereas international investors contributed asset type, Spanish LPs were the main source of new funds €853.5M, a decrease of 42.2% from the prior year in terms raised by Venture Capital vehicles, contributing €610M of of their commitments in domestic new Spanish funds. A the €797.7M recorded. In terms of Private Equity vehicles, majority of the funds from international investors came international LPs stood out, contributing 60% of the total from Europe, totaling 37% (Luxembourg, the United (€1,122.5M). Kingdom, the Netherlands and Switzerland stood out), followed by the United States with 6.3%. Broken down by

New funds raised by Spanish private VC&PEs entities according to geographic breakdown of investor (LP) in 2019

€ Millions . . . . . . . . . . . . Domestic LPs International LPs thers agenies Finanial investors

Source: ASCRI / webcapitalriesgo Insurane managers Corporate Goverment ompanies Institutions

ther asset Family office Family Fund of funds Pension funds

tart-up financing as the main recipient Intended application of new funds raised by of capital raised by Spanish private Spanish private VC&PEs entities in 2019 entities15. Fundraising for start-up financing Shas been placed above any other category as the main investment destination for funds raised. This is because of ther the concurrent closure of several domestic Venture Capital funds for between €40M and €60M. However, an ongoing challenge for the Spanish market is the fact that Spanish Leveraged uouts Venture Capital managers are raising larger funds that provide them with the capacity to finance the last stages Groth Capital of Spanish start-ups (late stage venture), rounds that are currently being led by international Venture Capital GPs, arl Stages as their funds are generally much larger. In 2019, growth Venture Capital funds accounted for the second highest application of new funds raised (32.4% of total). Lastly, mature companies (MBO/MBI) accounted for 26.2% of intended application 2019 (€870M) of new funds raised. 2018 Source: ASCRI / webcapitalriesgo

15 This data is developed based on the answers provided by those entities that responded to the question "Intended application of new funds raised” on the questionnaire. 18 Investment

ecord high Private Equity & Venture As in previous years, the investment volume can be Capital1 investment in Spanish explained by the momentum of large transactions4 (equity companies in 2019 for the third investments over €100M per transaction), headed by Rconsecutive year. Following two years of record international funds, but also by the momentum of the middle investment both by volume and number of investments, market5 (equity investments between €10M–€100M) and 6 Private Equity & Venture Capital2 investment in 2019 Venture Capital segments, which saw record highs. exceeded all record highs, totaling 3, representing €8.526,9M The factors that led to this expansion stage for the sector from 2018 (€6,013.4M). 41.8% growth 75.8% of total in Spain continued through 2019, namely a favorable , compared to volume was allocated to new investments macroeconomic environment, investor appetite (and with 84.8% in 2018. The remaining 24% was allocated to follow ample capital resources available for investment), interest ons. in Spanish assets and bank financing availability. However, A comparison between the two main segments of this the threat of a potential change in the economic cycle sector shows that Private Equity investment totaled translated into greater caution in investment decisions. The €7,743MM (+40.6% from 2018) across 172 investments. new situation created by COVID-19 and the consequent Venture Capital investment totaled €721.9M (+42.8% from slowdown in the economy, in addition to the uncertainty, 2018) across 588 investments. will have an impact on many different sectors, including Venture Capital and Private Equity. In order to reflect the impact of the investment, we have calculated total transaction value of Venture Capital and The interest of international funds in the Spanish market Private Equity investments for the first time in 2019, defined has undoubtedly contributed to this expansion of the as the sum of total equity invested by Venture Capital and sector in Spain in recent years, reflected in the significant Private Equity firms €8,526.9M ( ) plus investments made activity of these funds in 2019, with a total investment of by co-investors (LPs, management teams, corporations, €6,714.5M in Spanish companies (78% of total amount shareholders, etc.) plus, in the case of leveraged invested), a new record high for the third consecutive transactions, debt provided by the banks and/or alternative year by these funds. The presence of these funds in the debt. In 2019, this figure totaled €14,874.9M, of which Spanish market started in the 90s, with a clear investment €13,697M were Private Equity investments (€7,743M in focus on investing in consolidated companies. However, in equity + €5.954 co-investment and debt) and €1,177.8M recent years, not only has their activity increased in terms of were Venture Capital investments (€721.9M in equity + volume, but also by types of transactions, including funding €456M co-investment). of companies from the initial to mature stages. Following

Investment by type of entity (GP)

€ Millions International GP Domestic private GP Domestic public GP Number of investments Source: ASCRI / webcapitalriesgo

1 This chapter analyzes investment in terms of equity contributions by domestic (public and private) and international Venture Capital and Private Equity managers in Spanish companies. Therefore, investments made by Spanish managers outside of Spain, which totaled €393M across 143 investments in 2019, are not included. Likewise, investments made by infrastructure funds, real estate funds, funds of funds, corporate bond funds and accelerator, incubator and business angel funds are not included. 2 The terms fund, manager (GP - General Partner) and Venture Capital and Private Equity Firm (VC&PE) are used indistinctly in this report to refer to Venture Capital and Private Equity operators. 3 All figures in this report are provided in millions of euros (“€M”). 4 For further information, please refer to the section: “Large Market. International Managers” of this report. 5 For further information, please refer to the section: “Middle Market” of this report. 6 For further information, please refer to the section: “Venture Capital” of this report. 19

the trend of previous years, the activity of international total of 586 Spanish companies (90% managers in the large market segment stands out, having SMEs) received Venture Capital & Private invested €5,719.8M in 19 transactions, contributing to the Equity funding in 2019. Regarding the number record high Venture Capital and Private Equity investment Aof investments in 2019, a record high of 760 investments7 figure recorded in Spain in 2019. In 2019, international in 586 companies was recorded as well. The proportion of funds closed a total of 137 investments, all-time high for new investments to expansions of previous investments the fifth consecutive year. Yet again, the increased activity has maintained approximately the same ratio since 2014. of international funds in the Venture Capital sector is also Specifically, 60.8% of investments were directed towards noteworthy, reaching a new record high in the number of companies that, until 2019, had never received Venture investments made in Spanish start ups, with a total of 91. Capital or Private Equity investments. Between 2015 and 2019, the Venture Capital and Private Equity sector has Furthermore, domestic private Venture Capital and funded approximately 2,715 companies, approximately Private Equity firms (hereinafter, “GPs”) invested a total 90% of which are SMEs. of €1,684.2M (+22.3% from 2018) across 453 investments (-9% from 2018). As in recent years, investment ecord High Investment in Europe. Despite contributions were supported by the momentum of the a 2019 marked by political uncertainty generated by middle market. Meanwhile, private domestic Venture Brexit and the slowdown in economic growth in some Capital funds stood out in terms of number of investments Reconomies, coupled with trade tensions between the United closed each year. Direct investment activity by domestic States and China, last year was the best year on record for public GPs recovered to €128.2M (+134.7% YoY), allocated Venture Capital and Private both in Spain and in Europe. to 170 investments (+41.6% from 2018). Likewise, the At the European level,8 investment also reached record public sector continued supporting Venture Capital and levels, never seen before 2019, both by volume and by Private Equity through its investment activity (as Limited number of investments, exceeding €94,000M across 7,902 Partner or “LP”) both in Private Equity and Venture Capital investments (84% in SMEs), representing growth of 10% and vehicles, as further explained in the "Fundraising" section 8% from 2018 respectively for both variables. Investment of this report. in Venture Capital and Private Equity as a percentage of GDP totaled 0.53%, the highest percentage since 2008.

he intense investment activity of €100M) in 2019 (18 out of the 19 large transactions recorded international funds in the large market were buyouts), all of them led by international funds. These (transactions with equity investments funds invested a total of €5,976.4M in buyouts across 31 Tabove €100M) boosted the amount of transactions (compared to €3,053.2M and 22 investments leveraged transactions9. Venture Capital in 2018). The expansion seen prior to the COVID-19 crisis reached an all-time high by volume of favored this type of transaction thanks to the ease with which investments. traditional and alternative bank debt could be accessed, such as direct lending, which allowed for flexible structures Investment by stage of the investee company, by volume, with a lower financing cost. Domestic Private Equity GPs followed a very similar pattern to that seen in recent years increased their investment in buy outs to €905.8M across in which leveraged transactions stand out over other 37 investments (compared to €535.9M in 25 investments categories, totaling €6,880.2M in 2019, representing 80.7% in 2018), due to the fact that many of the middle market of the total. The weight of leveraged transactions was again transactions were buy outs. supported by the number of large transactions (equity >

7 The number of investments as published in this report is calculated from the investor perspective, meaning that some investee companies may be double counted in the case of syndicated investments by Venture Capital and Private Equity firms. 8 Data from "Investing in Europe: Private Equity Activity 2019," published by Invest Europe in May 2020. 9 Investments in mature companies using equity and external debt to acquire a share in the company. Also referred to as LBO, MBO (buyouts) or MBI. 20 Investment

The financing of growth in mature companies (growth 588 closed (77% of total), setting a record high for the capital),10 with €647.8M invested, maintained levels very fifth consecutive year. 204 investments were recorded similar to those seen in 2018 (€658M), with investments in start up11 stage, followed by other early stage12 (196 by domestic GPs standing out, totaling €510.5M compared investments), seed13 (75) and late stage venture14 (113). to the €145.7M invested by international GPs. In total, 90 For a detailed analysis of investments in the seed, start up, growth capital investments were made, most of which (76) other early stage and late stage venture stages see Chapter were led by domestic GPs. [A list of the main growth capital 6, on Venture Capital. The remaining investee companies, by and buyout investments is provided in Table in page 39, 40 number, belong to the replacement15 (6 investments) and and 41]. other16 (8 investments) categories.

By number of investments, companies in start up stages (Venture Capital) received the most investments with

Stage distribution of Venture Capital & Private Equity investments

Seed Growth € Millions Start-up + other early LBO/MBO/MBI/LBU stages Other Late stage venture Source: ASCRI / webcapitalriesgo

he Other Services sector was the primary Resources (18.3%), in transactions includingCepsa and Miya recipient of Venture Capital and Private Water. These were followed by Consumer Goods (11.9%), in Equity financing, and the IT sector transactions including Grupo Alvic, Neolith, Natra, Productos Treceived the highest number of investments. Alimenticios Gallo and Palacios Alimentación, Industrial Regarding sectors,17 Other Services received 25.3% of funds Products and Services (10.3%), including companies such invested (in transactions includingDorna Sports, Universidad as Maxam Europe, Konecta, Jenealogía, De Wave Group and Europea de Madrid, Accelya and Universidad Alfonso X Lexer, and Leisure (7.8%), in transactions including Áreas, el Sabio, among others), followed by Energy / Natural Telepizza and Hotel & Resorts Blue Sea.

10 Funding of growth in mature companies only through equity. 11 Investment in start ups: first round of investment in companies with early sales but negative EBITDA 12 Other early stage: refers to follow-on rounds or Series B/C investments in startups 13 Seed: Investment in companies without sales 14 Late stage venture: Investment in growth companies with positive sales and EBITDA 15 Buying a minority stake from an existing shareholder of the investee company. 16 The “other” category includes private investment in public equity (PIPE), restructuring, reorientation and refinancing transactions. 17 See page 58 of this report for a description of the activities included in each sector. 21

By number of companies, the IT sector ranked first (306 total), Industrial Products and Services (8.8% of total) and investments, representing 40.2% of the total 760 investee Healthcare (8.7% of total). companies in 2019), followed by Consumer Goods (9.9% of

Private Equity & Venture Capital investments (amount) by sector in 2019

Transport Finanial Servies Communiations iotehnolog griultureLivestokFishing Medialelthare Computer related Leisure Industrial Produts Servies Consumer related produts nerg atural esoures thers Servies

Source: ASCRI / webcapitalriesgo

adrid led Venture Capital & Private 226 investments, followed by Madrid (171), the Basque Equity investment. The geographic Country (104) and the Autonomous Community of Valencia distribution of the Venture Capital and Private (53). MEquity investments highlights the wide disparity between the various regions of Spain when it comes to attracting Volume invested by region in 2019 investment. Madrid stood out with 63.2% of total investment in Spain, followed by Catalonia (12.5%), the Autonomous Community of Valencia (9.2%) and Andalusia 0.1% 0% 2.1% (4.6%). In the case of Madrid the Cepsa, Dorna Sports, 2.6% 1.4% Universidad Europea de Madrid, Maxam Europe, Konecta, 1.3% 1.2% 12.5% Vitaldent, Alfonso X el Sabio, Telepizza, Miya Water, 0.4% Masmovil, Neolith and Natra transactions were crucial. In , the 63.2% Catalonia Accelya, Áreas, Ekon, Grupo Isolana, Implika, 0.5% Glovo, Digital Origin Job and Talent, Tendencias Ceramicas 0.2% 9.2% (Tencer) and Quimi Romar transactions stood out, and in the 0.5% Autonomous Community of Valencia, those of Igenomix, 0.2% and Germaine Jenealogia, Citrico Global, Babaria, GreenE 4.6% de Capuccini; as well as the investments in Alvic, Productos

Alimenticios Galloand Agroponiente in Andalusia. 0.3%

Regarding number of investments by region, Catalonia topped the ranking, as has been the case since 2010, with Source: ASCRI / webcapitalriesgo 22 Investment

Venture Capital and Private Equity activity in 10M) stood out with a total of 43 investments, an all-time Spain primarily focused on financing SMEs. high just like in 2018, as well as the €25-50M segment, with Investments in SMEs are dominating the Spanish market. 28 transactions (compared to 16 in 2018) and the large Of the 760 investments made in Spain by PE&VCs in 2019, market (transactions exceeding €100M), which recorded a 686 were made in SMEs with fewer than 100 employees. new high of 19 transactions.

According to transaction size, business finance below €1M The intense activity in the middle market and large ranked first (with60% in 2019), while 22% of the companies transaction segments resulted, again in 2019, inan received between €1 and 5 million, 5.7% between €5 and 10 increased average amount per investment, to €11M (the million, 5% between €10 and 25 million and 4.9% between average in 2018 was €8M). As regards companies, each of €25 and 100 million. The rest (2.5%) relates to transactions the 586 investee companies in 2019 received an average of more than 100 million. Among the different segments, of €14.5M in Venture Capital and Private Equity financing, the lower middle market (investments between €5 and compared to €10M in 2018.

Venture Capital & Private Equity investments (number) by company size in 2019

to emploees to emploees to emploees More than emploees

Venture Capital Private Equity Source: ASCRI / webcapitalriesgo 23 Middle Market

ecord high in the Spanish middle market.1 and number of transactions. Their investments in late stage Intense fundraising for new Spanish middle market ventures stood out, having closed an all-time high of 7 vehicles in recent years has been reflected in the investments with contributions between €10M and €100M, Rgradual recovery of this investment segment, maintaining of the 22 middle market investments made in Spain. pre-crisis levels and even reaching an all-time high in In 2019, as was the case in the previous year, the largest 2019. In 2019, the total amount invested in this market number of investments were made in the €25–50M equity segment was €2,069.8M (compared to €1,557.8M in 2018) investment range, accounting for 28 investments, 20 of across 75 investments (63 in 2018). Investments in mid- which were made by domestic GPs. This was followed by sized companies represented 24.2% of total investment the €10–15M tranche, accounting for 20 investments this in the Venture Capital and Private Equity sector in Spain past year. (€8,526.9M). 89.4% of invested capital was directed towards companies that had previously never received any Prior to the COVID-19 pandemic, Spain's economy was Venture Capital or Private Equity financing (a percentage growing above the European average, with a business fabric similar to 2018, with 92.8%). made up of companies that, having successfully overcome the previous financial crisis and internationalized, have As is becoming the norm in the Spanish market, domestic opted to seek funding from the private market to continue funds lead this segment, with €1,341.1M invested in their growth. On the demand side, Spanish and international middle market transactions in 2019 (+33.4% from 2018) Venture Capital and Private Equity GPs have been gaining across 53 investments (5 more than in 2018). On the experience and the ability to develop investment strategies other hand, international GPs contributed €728.7M in 22 adapted to the different companies with financing needs, investments (7 less than in 2018); a record high year in and have also had their new resources to invest (thanks Spain for midmarket deals by these funds, both by volume

Middle market investments

€ Millions

49 30 30 33 23 12 29 50 51 56 63 75 deals

Volume Source: ASCRI / webcapitalriesgo

1 Investments in companies, with equity contributions between €10M and €100M. 24 Middle Market

to the fundraising activity), as well as access to cheap Private Equity GPs that are now, more than ever, applying and flexible financing. This mix of supply- and demand- a “hands-on” management approach to their investee side factors have favored very active years for financing, companies. As market volatility and uncertainty decrease, supporting the growth and value creation of Spanish activity is expected to recover, albeit very gradually, which midcaps by Venture Capital and Private Equity firms. means that this investment segment will bear the impact of the crisis in the coming months. However, Venture Starting in March 2020, companies have focused on Capital and Private Equity, as a long-term investor, will play ensuring liquidity and preserving business continuity, a an important role during this new cycle in capitalizing and common and priority objective for Venture Capital and supporting companies in the face of the crisis.

Middle market investments by size of investment

€ Millions

to to to to to to

2016 2017 2018 2019 Source: ASCRI / webcapitalriesgo 25

nvestment in LBOs continues to stand out2. As regards sectors3, the middle market has historically Favorable financing conditions, including both bank and focused on traditional industries, although support for the alternative financing (direct lending), continue to drive up funding of start-ups in a more mature phase by international Ithe number of LBOs in the middle market, from 28 in 2018 funds has upset the ranking of the main sectors in 2019. to 40 in 2019, totaling €1,262.3M in 2019 (€895M in 2018). The Consumer Goods sector received the highest As for Growth Capital, 22 investments were completed, investment volume (€522.2M; 25.2% of total), followed by totaling €498.6M. Venture Capital received 8 investments IT (€308.3M; 14.9% of total), Agriculture (€232.7M; 11.2% (4 more than in 2018), recording a total volume of €215.2M. of total), Healthcare (€196.3M; 9.5% of total) and Leisure As regards GPs, the investments of international funds (€179.5M; 8.7%). in the middle market in 2019 were broadly split between The following stand out in the sector distributionby number buyouts, late stage venture and growth capital. Domestic of investments: Consumer Goods (17), IT (10), Healthcare, funds, investments were distributed between buyouts (64% Industrial Products and Services, Agriculture and Leisure (7 of total investments, across 29 transactions) and growth investments in each of these categories). capital (28.1% of volume invested, across 18 transactions). [A list of the main middle market transactions is provided in page 40.]

Stage distribution of middle market investments

€ Millions

Seed Growth Start-up + other early LBO/MBO/MBI/LBU stages Others Late stage venture

2 Investments in mature companies using equity and external debt to acquire an interest in the company. Also referred to as leveraged transactions, MBO (buyouts) or MBI. 3 See page 58 of this report for a description of the activities included in each sector. 26 Large Market. The International GP in Spain

nternational funds led the large market in Water), Providence (Masmovil), Investindustrial (Neolith), Spain. The market for large transactions (>€100M in The Carlyle Group (Jeanologia), Investindustrial (Natra), equity1; also known as “megadeals”) reached a record Platinum Equity6 (Iberconsa), Vista Equity (Accelya). Of Ihigh in 2019 for the third consecutive year, both by these transactions, three were public to private, 7following investment volume and number of transactions closed. one of the hallmark trends of 2019 at the global level. This investment segment continued to be led exclusively The above-mentioned transactions represented 67% by international GPs which, thanks to the size of the funds (€5,719.8M) of total investment in Spain. In 2019, average they manage, displayed a great investment capacity which equity or capital invested per transaction in this segment enabled them to take on large transactions. Once again, totaled €301M compared to €418.1 in 2018. megadeals have helped to support market size contributing Globally, unlike in Spain, the momentum of large transactions an average of more than 60% of total Venture Capital & slowed down due to intense market competition and high Private Equity investments in Spanish companies in recent valuations8. years. nvestment of international Venture In 2019, 19 large market transactions in 18 companies were closed, of which five were co-investments with domestic Capital and Private Equity funds in Spain GPs: (Cepsa), reached a record high in 2019 for the third The Carlyle Group CPPIB and Bridgepoint Iconsecutive year. The last few years have consolidated (Dorna Sports), (Universidad Europea Permira Asesores Spain as one of the main investment destinations for de Madrid), 2 (Areas), , PAI Management Rhone Capital international Venture Capital and Private Equity thanks to (Maxam), , (Konecta), 3 (Ingenomix), ICG EQT Partners macroeconomic developments, the strength of Spanish (Vitaldent), (Alfonso X El Sabio), Advent International CVC companies in the aftermath of the crisis, and confidence 4 (Telepizza), 5 (Grupo Alvic), (Miya KKR KKR Bridgepoint in Spain's growth prospects. The attractive market

Investments by international entities in Spain (by size of investment)

19 13 7 6 9 9 6 9 € Millions 5 Investments > 100M€ 4 4

Investments < 100M€ 2 Nº investments Nº inv. > 100M€ Source: ASCRI / webcapitalriesgo

TRANSACTIONS CLOSED IN THE SPANISH LARGE MARKET 2016 2017 2018 Cinven & CPPIB PE (Hotelbeds), CVC Capital Partners (CLH), Hellman & Friedman (Allfunds CVC Capital Partners (Gas Natural), Blackstone Providence Equity (MásMovil), Cinven Bank), Eurazeo (Iberchem), BC Partners (Pronovias), (Cirsa), Cinven (Ufinet Latam), Orient Hontai Capital (Tinsa), ICG (Garnica), Apax Partners Providence (NACE), Lone Star (Esmalglass), Trilantic (Imagina Media Audiovisual), Towerbrook Capital (Invent Farma), The Carlyle Group Partners (Grupo Pacha), CVC Capital Partners y PAI Partners, (Aernnova), Ardian, (Grupo Monbake), (Cupa Group), Cerberus (Renovalia Management (Cortefiel), Rakuten (Cabify) CVC Capital The Carlyle Group (Unideco (Codorniu Raventós), Energy) & KKR (Telepizza) Partners (Vitalia Home) & Warburg Pincus (Acceltya) Cinven (Plantas de Navarra) & ICG (Suanfarma)

1 All investment amounts published by ASCRI refer to the equity or capital invested. 2 Co-investment with Alpinvest 3 Co-investment with Charme Capital Partners 4 Co-investment with Torreal 5 Co-investment with Artá Capital 6 Co-investment with Portobello Capital 7 Market volatility combined with the abundant market liquidity has favored Public to Private transactions. 8 "Global Private Equity Report, 2020", Bain & Company. 27

coupled with investor appetite, driven by an abundance compared to 137 investments in 2019 (20 more than in of capital, in terms both of debt and equity,9 has resulted 2018), 86 of which were new investments (compared to 85 in three consecutive years of record high investments by in 2018) and 51 expansions (32 in 2018). international Venture Capital and Private Equity funds in Spanish companies. Specifically, and despite geopolitical In terms of volume, international GPs stood out for their 10 uncertainty and prudent investors in the face of a potential intense activity in leveraged transactions (€5,976.4M change in economic cycle, Venture Capital and Private Equity in 2019) in Spain thanks to the significant weight of large transactions. By number of transactions, recent years have investments in Spain by international funds in 2019 broke shown a growing interest of international venture capital all records, investing €6,714.5M in Spanish companies (compared to €4,582.2M in 2018), representing 78% of total funds in investing in Spanish start-ups, and in 2019, an all- Venture Capital and Private Equity investments in Spain. Of time high was reached in number of transactions by this type of investor in this segment (91 investments), with this amount, €5,719.8M were in megadeals, €728.7 were the "other early stages" category standing out as receiving middle market transactions (equity investments between €10M and €100M from both Venture Capital and Private the largest number of investments (37) compared to the other categories, followed by "late stage venture" with 32 Equity) and the rest, €266M were transactions involving transactions. equity investments of less than €10M. The number of companies financed by international funds has also grown The number of international Private Equity & Venture In 2013, these funds significantly over the past few years: Capital funds operating in Spain grew from 25 in 2006 to closed a total of 47 investments in Spanish companies, as 24011 in 2019.

Number of international entities investing in Spain (by size of funds managed)

182 157 132 98 84 61 53 Nº of entities 41 46 29 34

Large GPs - manage or advise on more than €150M Medium GPs - manage or advise on between €50 - €150M Small GPs - manage or advise on less than €50M

9 Internationally, fundraising activity has been particularly intense over the last 4 years, surpassing half a trillion euros annually (according to Prequin), thanks mainly to large funds that have been gaining in size. 10 Investments in mature companies using equity and external debt to acquire an interest in the company. Also referred to as LBO, MBO (buyouts) or MBI. 11 A list of the international VC&PEs with activity in Spain is provided at the end of this report. 28

Number of investments by International GPs

Seed Start-up Other early stage Later stage venture Growth LBO Other Total 2017 0 8 33 22 9 21 1 94 2018 3 16 43 22 9 22 2 117 2019 3 19 37 32 14 31 1 137

everaged transactions led in international Capital, reflecting the interest in the Spanish entrepreneurial funds' portfolios. In 2019, the international ecosystem. management companies portfolios12 totaled Regarding sectors,14 Other Services (21.6%), Energy / L€20,554.8M in 369 investments. Investment of international Natural Resources (15.3%), Consumer Goods (12.5%), IT (9%), Venture Capital and Private Equity funds in Spain has been Industrial Products and Services (6.1%), Financial Services traditionally directed at consolidated companies, as evidenced (5.8%) and Leisure (5.3%) were the sectors that received by the composition of these funds' portfolios: 73.5% of the highest investment levels. By number of investments, is invested in consolidated companies through volume buyout IT received 171 investments, followed by Healthcare (35), transactions, 9.2% in other transactions,13 7.9% in companies Consumer Goods (32), Other Services (26) and Biotechnology in replacement and growth stages and 9.4% in startups and (21). other early Venture Capital stages. However, more than 230 of the 369 portfolio investments were made in Venture

Portfolio of international GPs in Spain by sectoral distribution (by volume) in 2019

Transport .

ealth related . Communiations . ther Servies .

Leisure .

Finanial Servies . nergatural esoures . Industrial Produtos Servies .

Computer related Consumer related Produts .

12 Value (at price cost) of all investee companies managed. 13 The “other” category includes: restructuring, reorientation and refinancing transactions. 14 See page 58 of this report for a description of the activities included in each sector. 29 Venture Capital

MAIN CONCLUSIONS FOR 20191

Venture Capital Key Indicators

Fundraising Investment Divestment

€ Millions € Millions € Millions

Fundraising Investment international VC Divestment Investment domestic private VC Investment domestic public VC

• Record year for Venture Capital investment in Spanish across 367 investments, of which nearly 50% were in start ups totaling €721.9M2 in investments, the best the earliest stages and the other 50% were in more year on record. Investment in late stage venture advanced start up stages. This intense activity was start ups, with several rounds having investment supported by the new funds being raised both by tickets in excess of €10M (led by international funds), existing firms and by new management companies significantly contributed to this record high. that have started activity in recent years, some of them led by entrepreneurs who have decided to create their • Supporting the innovation ecosystem: 431 Spanish own Venture Capital management companies. start ups received domestic and international Venture Capital funding (459 start ups in 2018), of • Public Venture Capital firms regained some of which 269 received this type of investment for the the ground lost in direct investment, doubling the first time, second best figure on record after 2018 (299 investment volume recorded in 2018. Their investment start ups). activity was particularly focused on the digital, consumer goods and medical/healthcare sectors. • Progressive maturity of start ups: 106 start ups received funding in excess of one million euros, of • The presence of international funds in the innovative which 12 start ups received over €10M, the best Spanish ecosystem continues to increase each year, figure on record. 21 investments3 in 14 start ups were both by investment volume in start ups (56% of total made in the €5–€10M range, a range that traditionally Venture Capital investments in Spain in 2019) and by sees little activity. In five years, investments inthe number of start ups funded (91 investments in 53 start €5M–€10M range have increased from €49.6M in ups) as well as by the number of new funds entering 2015 to €140.6M in 2019. the market each year (of the 37 new funds investing for the first time in Spain, 28 were Venture Capital funds). • Private domestic Venture Capital entities were the It is increasingly common for international Venture primary investor in terms of number of start ups. In Capital funds to invest in Spanish start ups without the 2019, investment reached a record high (€239.8M) backing of local funds.

1 All statistical data on the Venture Capital sector is available on page 52 and 53 . 2 METHODOLOGICAL NOTE: The statistical data provided by ASCRI/webcapitalriesgo on investment has been calculated on the basis of actual payments (equity and quasi-equity) made by domestic and international Venture Capital and Corporate Venture firms to companies headquartered in Spain. This criterion differs from that used by other public sources who account for investments in terms of the equity received by the start up, regardless of the type of investor. We refer to this variable as “transaction value”, which we have calculated in our report for the first time this year, as a supplement to the pure Private Equity and Venture Capital data we analize. All figures are provided in millions of euros. 3 The number of investments published in this report is calculated from the perspective of the funds, meaning that some investee companies may be double counted in the case of syndicated investments. This explains why 588 investments in 431 start ups have been analyzed in this year's chapter on Venture Capital. 30 Venture Capital

• The maturity being reached by certain Catalonian management companies (€721.9M) plus investments start ups has led to over 66% of late stage investments made by co-investors such as LPs, management teams, in 2019 being made in Catalonia. corporations, etc., and which totaled €455.9M. In 2019, total investment volume in terms of Venture • Spain mirrored the European average for Venture exceeded Capital investment in terms of GDP, reaching 0.06% in Capital transaction value €1,177.8M. 20194. • Total transaction value of Venture Capital investments was calculated for the first time in 2019, defined as the sum of total equity invested by Venture Capital

Summary of Venture Capital investment in Spanish start ups in 2019

2019 DOMESTIC INTERNATIONAL Corporate VC (Investment) €28.2M €23.6M Private VC (Investment) €211.6M €419.6M Public VC (Investment) €38.9M - Active Ventre Capital GPs (2019) 79 68 Total Investment €278.7M €443.2M No. of Investments 497 91 Start Ups Invested 4015 53 Avg. Round (€M) €0.61M €8.36M Avg. Ticket (€M) of Investments €0.49M €4.87M

VENTURE CAPITAL ACTIVITY IN 2019

ll-time high in volume invested by in the €1M–€2.5M (91 investments in 2019 compared to 71 Venture Capital funds in Spanish in 2018), €2.5M–€5M (39 investments in 2019 compared start ups, supported by the to 26 in 2018) and €5M–€10M (21 investments) segments, Astrength of international funds, which resulting from the growing entrepreneurial ecosystem. , attracted by the maturity of the increased momentum of late stage venture International funds ecosystem and its start ups, continue to play a key role (79 domestic and investments. Venture Capital funds thanks to their participation in those stages that require 68 international entities) invested a total of €721.9M in higher funding. In 2019, investment of these funds totaled in 2019, from 2018 Spanish companies a 42.8% increase , the best figure on record, (€505.5M). This excellent figure is explained in part by a €443.2M (+70% from 2018) across 7 (an all-time high). growing number of Spanish start ups reaching maturity 91 investments in 53 companies As at the end of and requiring larger funding rounds. In 2019, a total of 2019, 156 of the approximately 240 12 start ups received funding in excess of €10M, a record international entities with Spanish portfolio companies At the national level, the high. Most of these larger rounds were syndicated by were Venture Capital firms. sector had close to 106 firms investing in Venture Capital,8 international Venture Capital funds, as is becoming the 77 of which were dedicated exclusively to Venture Capital norm in the Spanish market. By number of investments,6 in and 6 of which were public. 2019, there was a shift towards higher tickets, in particular

4 In 2019, Venture Capital investment volume reached the highest figure in Europe since 2013 (€11,000M). Data from the "Investing in Europe: Private Equity Activity 2019" annual report, published by Invest Europe in May 2020. 5 A total of 431 companies received funding in 2019, 23 of which were co-invested by domestic and international funds. 6 The number of investments accounts for each of the investment decisions made by the funds, such that a company may receive several investments at a time (funding round) if the investment has been syndicated by several investors. 7 23 of these 53 start ups receiving investment were co-investments between domestic and international Venture Capital funds. 8 Venture Capital and Private Equity firms with an investment focus on Venture Capital and that have portfolios in which seed, startup, other early stage and late stage venture account for at least half of the portfolio. 31

ecord high Venture Capital investment by of start ups receiving Venture Capital funding for the first domestic funds. New funds raised by private time has practically doubled. Specifically, in 2019, 269 domestic Venture Capital funds in recent years, start ups received Venture Capital funding for the first Rtogether with increased leeway in the budget of public time (30 fewer companies than 2018). Capital injections entities for direct investments in 2019, has driven the in 162 companies were used to support the portfolio (+5% investment activity of domestic management companies vs. 2018, an all-time high). As regards Venture Capital to new highs. In particular, domestic entities increased funds that channeled capital to new investments, a total their investment in Spanish start ups, totaling €278.7M of €470.3M (an all-time high) was invested, while €251.5M (13.5% from the €245.6M invested in 2018). This volume were directed at extensions and follow ons of portfolio was distributed across 497 investments (82% for amounts companies in 2019. below one million euros). The last few years have been he maturity of the ecosystem shifts characterized by the progressive consolidation of the investment towards larger rounds. 75% entrepreneurial and innovation ecosystem in Spain thanks of start ups received investment rounds of less to the ongoing creation of new start ups (most funded Tthan €1M in equity, compared to 80% in 2018, whereas by domestic Venture Capital funds in small rounds) that start ups that received funds in excess of one million euros continue to mature, which has attracted numerous represented 25%, compared to 20% in 2018. This highlights international funds that see Spain as one of the most the health of the investment environment, in which new attractive European countries for channeling investor projects continue to receive funding for implementation, appetite and that are using their assets to fund larger while the more mature start ups are also able to access investment rounds. funds to boost their growth.. The new situation created by COVID-19 will have an ecovery in late stage venture9 in the impact on start ups, and their chances of survival will vary Spanish market. As a sign of the maturity depending on their sector and on their available liquidity, reached by an ever increasing number of start ups thus making it difficult to predict how severe the crisis will Rin the Spanish ecosystem, late stage venture continues to be as a whole. From an investment perspective, Venture show annual growth, reaching a record high in investment Capital management companies have focused on ensuring volume in 2019, totaling €321.6M. This amount was the survival of their portfolio of investees. Although some distributed across 65 companies, 34 of which received investment rounds in start ups continue to be closed, it Venture Capital funding for the first time (11 more than is critical that domestic Venture Capital funds maintain in 2018 and a record high). The remaining categories,10 by their investment capacity by attracting new funds, so as stage of investment, maintained levels very similar to those not to slow down the development of innovation in Spain. seen in 2018. As is becoming the norm, international funds Likewise, it is also essential that a framework of legal focused on financing start ups in their more mature stages, certainty and economic stability be maintained in order to whereas private domestic funds focused on financing start continue attracting the investment of Venture Capital funds ups in their earliest stages, which could possibly be a source and international corporations, key to funding late stage of future investment for international funds. Catalonia ventures and to divestment. stood out with the highest number of investments in late ecord-high in new investments. In 2019, stage ventures over the past two years (40 investments in 588 Venture Capital investments were made in 2019 and 36 in 2018). R431 companies. Over the last 5 years, the number

9 Late Stage Venture: Investment in growth companies with positive sales and EBITDA 10 Seed Stage: Investment in companies without sales Start up Stage: first round of investment in companies with early sales but negative EBITDA Other Early Stage: refers to follow-on rounds or Series B/C investments in startups 32 Venture Capital

rivate Venture Capital management recently, by Cofides, among others, which channel funds companies led investment in early to private domestic Venture Capital funds. In 2019, the stage companies. By type of entity, the public sector, in its role as an investor (LP) in domestic 12 Psignificance of investment fell, primarily, in (domestic Venture Capital funds, contributed €111M, the second and international) private entities, totaling €682.9M in best figure on record since 2014, when statistics on this investments in 2019 (94% of total volume invested), as figure were first prepared. After COVID-19, the public compared to €38.9M in investments by public funds11 sector will play an even more decisive role as a catalyst (second best figure on record since the recovery from for funding new Venture Capital funds and therefore, in the last financial crisis started), across 130 investments the indirect financing of start up. (+21.5% from 2018). Among the new developments in In 2019, the most active private domestic investors 2019, the launch of the “Coinversión Innvierte” program, (by number of investments) in Spain were, inter alia: aimed at the co-investment in start ups by private Inveready Technology Investment Group, Encomenda, Venture Capital funds and the State Public Agency CDTI, Caixa Capital Risc, Banco Sabadell (through Sabadell stands out. Venture Capital and Bstart up), Easo Ventures, Beable As mentioned in other reports, since the start of the 2008 Capital and Clave Mayor, among others. In the public financial crisis, public agencies, and in particular regional sector: Seed Capital Bizkaia, Sodena, Sodical and Gestión agencies, have been reducing their direct investment Capital Riesgo País Vasco. As regards international funds activity, due in part to lower budget availability. At the the following stood out by number of investments: same time, their role in funding SMEs and Spanish start Idinvest Partners, Cathay, Mangrove Equity Partners, GP ups has been carried out in recent years through the Bullhound and DN Capital. funds of funds programs launched by ICO (FOND-ICO Global, managed by Axis), the Catalonian Institute of Finance (Instituto Catalá de Finances - ICF) and, more

Investment by company stage in 2019 (by type of entity)

Volume Number of start ups

Millions € Nº of investments International VC Domesti Private VC Domesti Puli VC International VC Domesti Private VC Domesti Puli VC

Seed Startup Other early stages Late stage venture Seed Startup Other early stages Late stage venture

11 At the national level, public entities such as CDTI or Enisa, as well as regional public agencies, have continued to take actions aimed at supporting SMEs, through specific shareholder loan programs, which are not accounted for in this report, but which play a fundamental role in the funding of the Spanish entrepreneurial ecosystem 12 A more detailed description of the funds raised by Venture Capital & Private Equity is provided in the chapter of this report on "Fundraising." 33

CT and Digital accounted for 73% of Investment in the industrial sector, totaling €121.4M investment. In 2019, the sector distribution of (highest number in 5 years), grew by 54.9% from 2018, investments followed a very similar pattern to that seen funding more than 133 companies. In the last few years, Iover the last five years. Specifically,a total of €527.9M was the Life Sciences sector has been attracting numerous invested in 246 companies related to the ICT, Digital and international Corporate Ventures and Venture Capital Consumer sectors,(the two financing rounds carried out funds, resulting in the sector recording successive all-time by Glovo were decisive for this last category). International highs during the last five years. Specifically, in 2019, this funds stood out as contributing more than 73% of their sector received €72.5M (+7.4% from 2018) in 52 start ups. investments (€386M) to information technology start ups. The majority of investments were made by private domestic Venture Capital funds (€39M).

Venture Capital Investment Volume by Sector

Thousands € 2014 2015 2016 2017 2018 2019 ICT Industrial & Others Digital Life Sciences Source: ASCRI / webcapitalriesgo

arcelona and Madrid, Venture Capital the partnerships between Venture Capital funds, start ups hubs.13 With a total of €385M in investments in and universities, as well as for holding events and creating start ups headquartered in Catalonia, never has a innovation and entrepreneurship communities that have Bregion in Spain concentrated so much investment in early without a doubt contributed to the development of stage companies in a single year. Undoubtedly, the maturity early stage investments. They were followed, in terms of and attractiveness of many Catalonian start ups explains investment volume, by the Basque Country (with €33.3M this investment volume. Specifically, a total of €260M was invested in the region), the Balearic Islands (€24,3M), the invested in Catalonian start ups in the late stage venture Autonomous Community of Valencia (€16,2M), Castille- phase, compared to €99M received by late stage start ups León (€14.8M) and Galicia (€13,6M). Catalonia also led by in Madrid. Start ups headquartered in Madrid received number of start ups financed (129). Followed by Madrid €209.6M. Madrid and Barcelona continue to position (89 start ups), the Basque Country (85 start ups), the themselves as innovation and entrepreneurship hubs, Community of Valencia (28 start ups), Castille-León (27) collectively accounting for 82% of total Venture Capital and Navarre (23). Details on the distribution of investments investment in Spain, standing out from other regions for by stage of development in each Autonomous Region is provided on page 51 of the statistical annex.

13 According to The State of European Tech 2019 study published by Atomico and including dealroom data, Barcelona and Madrid are among the top 10 technology hubs in terms of capital invested and number of investments. London, Berlin, Stockholm and Paris lead the list. Madrid also stood out as one of the top 20 European cities by number of technology developers in 2019. 34 Divestments

ortfolio turnover picked up. The favorable At the European and global level, divestment contracted conditions that have been driving the market for slightly compared to 2018, albeit maintaining good levels company sales over the past few years continued over the past five years, thus allowing for unprecedented Pin 2019, favoring exits from companies invested in by capital returns for investors (LPs). The decrease in this Venture Capital and Private Equity for yet another year. In variable is due in part to the slow down of the economy this context, both industrial and financial investor appetite in parts of Europe and to the effect of Brexit.2 In Europe stand out thanks to the abundant liquidity on the market specifically, according to Invest Europe3, divestment and the low interest rate environment. This company totaled €31,000M (-16% from 2018) in 3,533 companies acquisition demand has generated very attractive multiples (-11% from 2018). for divestment, resulting in higher divestment levels (at price By type of entity, divestment was led by cost)1 in 2019 than 2018 (€2,039.3M), albeit not reaching international GPs (+137.2% from 2018) in the records of 2014 (€5,048.4M), 2015 (€3,850.3M) and with €2,294.8M 49 divestments (16 more than 2018). On the other hand, private domestic 2017 (€3,483.9M). In particular, divestments in 2019 GPs completed divestments totaling €593.8M (-43.2% for all Venture Capital and Private Equity firms totaled from 2018) in 150 divestments (-32.4% from 2018). Public €2,977.3M (+46% from 2018) across 337 divestments, domestic funds also recovered in this variable, divesting as compared to 321 in 2018. The several business sales €27M in 66 divestments in 2018 and €88.7M in 138 in excess of €100M in equity at the time of investment (8 in 2019) account in part for the recovery in divestment divestments in 2019. volume and, in particular, in that of international funds, The sector with the highest divestment levels in 2019 who currently lead large transactions in the domestic was IT (89 exits), followed by Consumer Goods (50) and market. Another contributing factor wasportfolio turnover Industrial Products and Services (39). By volume divested, in the middle market, which has been very active in recent the following sectors stood out: Other Services with €546M years, exceeding all record highs in 2019 (42 middle market (18.3%), followed by Industrial Products and Services with divestments in 2019). €491.1M (16.5%) Communications with €360.3M (12.1%) and IT (€342.9). 92% of divestment volumes arose from Private Equity transactions (€2,754M) and 66% of divestments were made in Venture Capital transactions.

Divestment by type of entity (GP)

€ Millions

International GP Domestic private GP Domestic public GP Source: ASCRI / webcapitalriesgo

1 The divestment activity covered in this section refers to all domestic (public and private) and international Venture Capital and Private Equity firms that have divested in companies headquartered in Spain, and all divestment statistics are provided at price cost in millions of Euros. As in the rest of this report, divestments made by infrastructure funds, real estate funds, funds of funds, corporate bond funds and accelerator, incubator and business angel funds are not included. 2 According to "Global Private Equity Report 2020", published by Bain & Company. 3 "Investing in Europe: Private Equity Activity 2019", published by Invest Europe in May 2020. 35

The average holding period for the portfolio was 6 years, Partners Group in Grupo Santillana, Sun Capital in Famosa, down from 2018. At the global level, the average is slightly Charme Capital Partners in Ingenomix and Riverside in lower, i.e. 4.3 years in 2019. Favorable prices for the seller Euromed. The following Venture Capital divestments stood together with the foreseeable market correction have out: Apax in Idealista, Index Ventures, Sequoia Capital, stimulated exits in recent years.4 Coral Group and Qualcomm in Fon Technology, Northzone, e.ventures, Innogest, Bonsai Partners and Caixa Capital Risc Some of the main divestments in the Private Equity sector in CornerJob, Najeti Capital inPalau Pharma, Serena Capital were headed by, a, Triton Partners in , in 2019 inter ali Befesa and Kibo Ventures Partners in iContainers, Telefónica Advent International in , Partners in Maxam Apax Electro Ventures in OpenSeneca, Debiopharm and Pontifax inAbac , Warburg Pincus in , Providence in , Stocks Accelya MásMóvil Therapeutics, Sodena in Vectia and 3P Biopharmaceuticals, Cinven Spain in s, Bridgepoint in a Sports, ICG Hotelbed Dorn Nauta Capital VC Partnes in Spotfront, and Adara Ventures and JB Capital Markets in , Artá Capital in , Vitaldent Mecalux and Caixa Capital Risc in PlayGiga, among others. The Carlyle Group in Palacios Alimentación, DLJ South and

he most commonly used divestment By volume, Write Offs decreased in relation to 2018, method in 2019 (by volume) was in terms of volume (from €63.4M to €52.5M in 2019), Secondary Buyout (SBO). This trend is in line albeit still the best figure recorded since the crisis began. Twith the rest of Europe, where SBOs also stood out as one of By number of transactions, only 54 divestments were the primary divestment methods for selling Venture Capital classified as Write Offs. At the European level, the low level and Private Equity portfolio companies. SBOs represented of write offs also stood out, accounting for only 4% of total 33.1% in Spain and 34% in Europe5. These were followed divestment volume. by (28.2%) and Trade Sale Owner's Buyback (10.4%). By number of transactions, the primary divestment The volatility of equities has slowed IPOs as a divestment method was Loan Repayment (41.2%), followed by Trade method worldwide. Since 1990, the number of IPOs has Sale (22.6%) and Write Off (16%). continuously fallen and the global trend is towards trying to meet companies’ financing needs in private markets.

Divestment Methods

€ Millions

Trade Sale Secondary buy out Stock market Loan Repayment Others Buyback Write off Source: ASCRI / webcapitalriesgo

4 "Global Private Equity Report 2020", published by Bain & Company 5 "Investing in Europe: Private Equity Activity 2019", published by Invest Europe in May 2020. 36 Portfolio

he Venture Capital and Private VC&PEs accounted for 71.2% of the portfolio, private Equity sector has a total of 3,202 domestic VC&PEs for 25.3% and public ones for 3.4%. investee companies in Spain valued This amount does not include an outstanding cumulative Tat €28,866.9M. The portfolio, at price cost, of the portfolio of €454.7M in loans from Enisa, CDTI and other Venture Capital and Private Equity firms (hereinafter, regional organizations. VC&PEs) operating in Spain totaled €28,866.9M as of 31 The portfolio of investees in Spain for the aforementioned December 2019. This includes the investee companies of domestic and international Venture Capital & Private Equity 166 domestic entities and 240 international entities, 78 firms as a whole totaled at the end of of which have on-going activity in Spain. The significant 3,202 companies 2019. After excluding the investments syndicated between increase in portfolio value in 2019, at price cost –up from several operators, the total portfolio was estimated to €22,990M in the previous year– can be explained by the consist of 2,627 companies. 3,942 companies backed by intense investment activity in recent years, compared to a Enisa, CDTI and/or a similar regional organization should be decrease in divestments, once the closing of the cycle of added to this figure. funds created before the crisis was completed. International

Portfolio at price cost of Venture Capital &Private Equity in Spain

€ Millions

International GP Domestic private GP Domestic public GP Source: ASCRI / webcapitalriesgo 37

The average investment at cost of the domestic and n aggregate employment terms, the international VC&PEs in each investee company was outstanding portfolio of the domestic estimated at €9.1M at the end of 2019, rising to €11M and international VC&PEs totaled 440,400 if the investments of several operators in the same firm Iworkers at the end of 2019, compared to 352,600 are added up. However, there is a noticeable difference in 2018, with an average of 168 workers per company. between the average per company investment at the end of Employment in the portfolio companies of Enisa, CDTI and/ 2019 recorded for international VC&PEs (approx. €55.7M) or other regional organizations added another 47,800 at the and for private domestic VC&PEs (€4.1M). end of 2019. Employment in new investee companies in The average length of time that companies remain in the 2019 was estimated at 140,800 workers, with an average portfolio of domestic and international VC&PEs is 4.4 years. of 361 workers for each new company added. With the 390 additional investee companies in 2019, including syndicated investments by several investors in a single company, the historic portfolio of the firms backed by domestic and international VC&PEs since 1972 is estimated at 6,939 companies. Firms backed by Enisa, CDTI and other similar entities that have not yet received Venture Capital/ Private Equity should be added to this figure.

Impact of Venture Capital & Private Equity in Spain

Numbers of companies Thousands of employees

Employees in portfolio companies Employees un initial investments Cummulative number on investee firms Source: ASCRI / webcapitalriesgo 38 2019 Main transactions 39 2019 Main transactions

2019 LARGE TRANSACTIONS IN SPAIN WITH EQUITY INVESTMENT > €100M

TYPE OF PRIVATE TARGET PRIVATE EQUITY FIRM INDUSTRY TYPE OF DEAL EQUITY FIRM CEPSA The Carlyle Group Energy Buyout International

Dorna Sports CPPIB, Bridgepoint Others services Buyout International

Educational Universidad Europea Permira Asesores Buyout International services

Áreas PAI Management, AlpInvest Leisure Buyout International Business and Maxam Rhône Capital industrial Buyout International products Business and Grupo Konecta ICG industrial Buyout International products EQT Partners, Charme Capi- Igenomix Biotechnology Buyout International tal Partners

Vitaldent Advent International Healthcare Buyout International

Universidad Privada de Educational Madrid (Alfonso X El CVC Capital Partners Buyout International services Sabio) International + Telepizza KKR, Torreal, Artá Capital Leisure Buyout Domestic International + Grupo Alvic KKR, Artá Capital Consumer goods Buyout Domestic

Miya Water Bridgepoint Energy Buyout International

MásMovil Providence Communications Others International

Neolith Distribution Investindustrial Consumer goods Buyout International

Business and Jeanología The Carlyle Group industrial Buyout International products

Natra Investindustrial Consumer goods Buyout International

Platinum Equity, Portobello Agriculture/ International + Iberconsa Buyout Capital Fishing Domestic

Accelya Vista Equity Partners Others services Buyout International

Source: ASCRI/webcapitalriesgo Note: Infrastructure, real estate and financial sector not included. 40 2019 Main transactions

MIDDLE MARKET DEALS CLOSED AND PUBLISHED IN 2019

TYPE OF PRIVATE TARGET PRIVATE EQUITY FIRM TYPE OF DEAL INDUSTRY EQUITY FIRM Productos Alimenticios ProA Capital Buyout Consumer goods Domestic Gallo Domestic + Palacios Alimentación MCH Private Equity, Ardian Buyout Consumer goods International International + Cítrico Global AlpInvest, Miura Private Equity Buyout Agriculture Domestic Elmubas Ibérica Portobello Capital, Oquendo Buyout Consumer goods Domestic Ekon Oakley Capital Buyout Software International Agroponiente Abac Capital Buyout Others services Domestic Self Bank Warburg Pincus Buyout Financial services International 3P Biopharmaceuticals Keensight Capital Growth Biotechnology International Frías Nutrición Alantra Private Equity Buyout Consumer goods Domestic GreenE Moira Capital Partners Growth Energy and environment Domestic Nuadi Artá Capital Buyout Transportation Domestic Grupo Preving Artá Capital Buyout Healthcare Domestic Grupo IMO / Innova Magnum Capital Buyout Healthcare Domestic Ocular AgrupaPulpí Magnum Capital Buyout Agriculture/Fishing Domestic Ginefiv Investindustrial Buyout Healthcare International IPD 2004 ProA Capital Growth Medical equipment Domestic Sidecu Portobello Capital Buyout Others services Domestic Goal Systems Three Hills Growth Software International Diater Nazca Capital Buyout Healthcare: Pharmaceutical products Domestic Babaria Corpfin Capital Growth Consumer goods Domestic Solitium ProA Capital Growth Business and industrial products Domestic International + Germaine de Capuccini Acon Investments, Torreal Buyout Productos de Consumo Domestic Fruxeresa y Frutas GPF Capital Buyout Agriculture/Fishing Domestic Naturales SOM Produce Gala Capital Growth Others services Domestic Sipay Plus Moira Capital Partners Growth Internet Domestic Litografía Alavesa MCH Private Equity Growth Business and industrial products Domestic Tendencias Cerámicas Realza Capital Growth Consumer goods Domestic Lexer Magnum Capital Buyout Business and industrial products Domestic Grupo Tragaluz Miura Private Equity Growth Leisure Domestic MCH Eurazeo Growth Financial services International Gestair GPF Capital Buyout Transportation Domestic 41

MIDDLE MARKET DEALS CLOSED AND PUBLISHED IN 2019

TYPE OF PRIVATE TARGET PRIVATE EQUITY FIRM TYPE OF DEAL INDUSTRY EQUITY FIRM Haizea Wind Group MCH Private Equity Growth Energy Domestic Quimi Romar GPF Capital Buyout Consumer goods Domestic Habock Aviation GED Iberian Private Equity Buyout Transportation Domestic Aquanaria MCH Private Equity Growth Agriculture/Fishing Domestic One Shot Hotels Nazca Capital Growth Leisure Domestic Zummo Meridia Capital Partners Growth Business and industrial products Domestic HealthTech BioActives Riverside Buyout Healthcare International Kipenzi Meridia Capital Partners Growth Consumer goods Domestic Cabonitel Gaea Inversión Replacement Communications Domestic Grupo OM GED Iberian Private Equity Buyout Others services Domestic Congelados de Navarra Oquendo Growth Consumer goods Domestic Pepe Jeans L Capital Asia Buyout Consumer goods International Silam Espiga Equity Partners Buyout Chemicals/Plastics/Materials Domestic Implika Suma Capital Growth Others services Domestic Isolana Abac Capital Growth Construction materials Domestic Cinelux Nazca Capital Buyout Business and industrial products Domestic Sanicen Corpfin Capital Buyout Consumer goods Domestic Restaurantes Saona Miura Private Equity Growth Leisure Domestic Equipe Ceramicas Oquendo Buyout Consumer goods Domestic TwentyFour Seven Nexxus Iberia Buyout Communications: Others Domestic Litografía Alavesa Realza Capital Growth Business and industrial products Domestic

Source: ASCRI/webcapitalriesgo 42 2019 Main transactions

SOME OF THE MAIN VENTURE CAPITAL1 INVESTMENTS CLOSED IN 2019

TYPE OF VENTURE TARGET VENTURE CAPITAL FIRM INDUSTRY TYPE OF DEAL CAPITAL FIRM Lakestar, Mubadala Capital, GP Bullhound Asset Management, Glovo Internet Later Stage Venture International Idinvest Partners, Korelya Capital Target Global, Spark Capital TravelPerk Partners, Amplo, Felix Capital, Internet Later Stage Venture International LocalGlobe Quadrille Capital, FJ Labs, Jobandtalent Internet Later Stage Venture International Atomico, DN Capital Alta Life Sciences, Columbus Venture Partners, CDTI, Caixa Capital Risc, Edmond, Forbion Capital Partners, Laboratoris Sanifit Pharmaceutical products Other Early Stages International Gilde Healthcare Partners, Healthequity, Lundbeckfond Ventures, Ysios Capital Partners, Baxter Ventures Accel Partners, Rakuten Inc, KzemosTecnologies Internet Later Stage Venture International 14W, Eight Road Ventures Digital Origin Prime Ventures Financial services Growth International Goodwater Capital, Target Badiapp Software Other Early Stages International Global Red Points Eight Roads Ventures Software Later Stage Venture International Seaya Ventures, Mutua Movo Transportation Start-up Domestic Madrileña VC Bnext DN Capital Financial services Start-up International Le Pain Quotidien Axon Leisure Later Stage Venture Domestic MMC Ventures, Bonsai Venture Capital, Gestión de Capital International + Lookiero Style Riesgo del País Vasco, Seed Internet Later Stage Venture Domestic Capital de Bizkaia, All Iron Ventures Bonsai Venture Capital, Kibo Ventures, Milano Investment International + Exoticca Partners, Kanoar Ventures, Internet Other Early Stages Domestic Nero Ventures, Sabadell Venture Capital GED Iberian Private Equity (Conexo Ventures), Seaya International + Buguroo Ventures, Ten Eleven Ventures, Software Later Stage Venture Domestic Inveready Asset Management, Sabadell Venture Capital Fintonic Servicios ING Ventures, Onza Venture International + Internet Later Stage Venture Financieros Capital Domestic Felicis Ventures, Khosla Overture Life Biotechnology Start-up International Ventures FJ Labs, GP Bullhound Asset Auro New Transport Transportation Start-up International Management Asabys Partners, Innogest Capital, Ysios Capital Partners, International + Anaconda Biomed Biotechnology Start-up Omega, Sabadell Venture Domestic Capital

1 Investments closed in Spain by national and international Venture Capital firms. Source: ASCRI/webcapitalriesgo 43

SOME OF THE MAIN VENTURE CAPITAL1 INVESTMENTS CLOSED IN 2019

TYPE OF VENTURE TARGET VENTURE CAPITAL FIRM INDUSTRY TYPE OF DEAL CAPITAL FIRM IDC Ventures, Maniv Mobility, International + Bipi by Llollo TA Ventures, Kibo Ventures Internet Other Early Stages Domestic Partners Dawn Capital, Slack Fund, Onna Search Technologies Software Other Early Stages International Nauta Capital VC Partners Lakestar, Nauta Capital International + Holded VC Partners, SeedRocket Internet Other Early Stages Domestic 4Founders Capital Idinvest Partners, 360 Capital, Breega, JME Venture Capital, International + 21 Buttons Kibo Ventures Partners, Internet Later Stage Venture Domestic Sabadell Venture Capital, Samaipata, Venturcap Cathay, Idinvest Partners, Total Energy Ventures, All International + Ninjatruck Iron Ventures, Atomico, GP Internet Other Early Stages Domestic Bullhound Asset Management, Point Nine Capital, Samaipata 360 Capital, Bonsai Venture Capital, Bbooster Ventures, International + Siganturit Solutions Internet Other Early Stages Nero Ventures, Sabadell Domestic Venture Capital, BStartup Cathay, DN Capital, Torch International + Housfy Internet Other Early Stages Capital, Seaya Ventures Domestic Casi Nuevo Kids Seaya Ventures Internet Other Early Stages Domestic 44 Statistical appendix 45 Statistical appendix

FUNDRAISING

AMOUNT (€M) TYPE OF VC&PE ENTITY (GP) 2016 2017 2018 2019 Domestic private entity 2,271.1 1,865.2 2,178.0 1,920.2 Domestic public entity 167.1 172.9 197.9 270.8 TOTAL 2,438.3 2,038.2 2,375.9 2,191.0 TYPE OF LP Domestic private entity 2016 2017 2018 2019 Financial institutions 211.6 168.9 154.6 65.7 Pension funds 97.8 372.5 241.4 114.6 Insurance Companies 174.9 114.2 212.8 111.5 Fund of funds 491.7 512.1 567.9 646.2 Corporate investors 81.4 66.2 65.4 206.2 Family office 459.9 260.0 485.2 558.5 Government agencies 348.6 235.4 239.7 138.8 Academic institutions 13.6 1.0 - - Other asset managers 150.0 60.1 61.0 34.9 Others 241.7 74.8 149.9 44 TOTAL 2,271.1 1,865.2 2,178.0 1,920.2 TYPE OF LP IN 2019 Domestic private entity Private Equity Funds Venture Capital Funds Total Financial institutions 5.5 60.2 65.7 Pension funds 100.9 13.7 114.6 Insurance Companies 32.2 79.3 111.5 Fund of funds 524.0 122.2 646.2 Corporate investors 98.1 108.1 206.2 Family office 273.7 284.8 558.5 Government agencies 27.7 111.1 138.8 GP commitments 29.2 11.1 40.3 Other asset managers 30.3 4.7 35.0 Others* 0.9 2.5 3.4 TOTAL 1,122.5 797.7 1,920.2 GEOGRAPHIC BREAKDOWN OF TYPE OF LP IN 2019 Domestic private entity Domestic LPs International LPs LPs Financial institutions 53.7 12.0 65.7 Pension funds 14.7 99.9 114.6 Insurance Companies 80.3 31.2 111.5 Fund of funds 17.0 629.2 646.2 Corporate investors 204.9 1.3 206.2 Family office 485.6 72.9 558.5 Government agencies 138.8 0.0 138.8 GP commitments 40.3 0.0 40.3 Other asset managers 30.9 4.1 35.0 Others* 0.5 2.9 3.4 Total 1,066.7 853.5 1,920.2

*As foundations and donations among others, 46 Statistical appendix

NEW FUNDS RAISED

AMOUNT (€M) LOCATION LP 2016 2017 2018 2019 Domestic private entity Spain 1,404.8 784.1 699.8 1066.7 Other European countries 581.1 796.2 1,091.0 720.0 United States 121.4 80.3 181.0 121.3 Asia 5.4 5.0 100.1 7.7 Canada 0.0 95.0 0.0 0.0 Others 158.6 104.7 106.1 4.4 TOTAL 2,271.1 1,865.2 2,178.0 1,920.2

DRY POWDER Domestic private entity 4,085.2 4,096.3 4,461.6 3,901.3 Domestic public entity 68.6 115.2 38.6 55.3 TOTAL 4,153.8 4,211.5 4,500.2 3,956.6

FUNDS UNDER MANAGEMENT

AMOUNT (€M) TYPE OF ENTITY (GP) 2016 2017 2018 2019 Domestic private entity 10,355.4 10,797.6 10,615.5 12,358.6 Domestic public entity 2,015.8 2,205.7 975.8 2,316.4 International entity 11,004.3 12,193.4 15,898.2 20,554.8 TOTAL 23,375.4 25,196.7 27,489.5 35,229.8

NUMBER OF ENTITIES BY TYPE OF GP 2016 2017 2018 2019 International entity 157 182 205 240 Domestic private entity 121 141 137 144 Domestic public entity 17 19 19 22 TOTAL 295 342 361 406

International Entity Domestic Entity All Entities BY SIZE OF FUNDS UNDER MANAGMENT 2018 2019 2018 2019 2018 2019 Large entities (>150 m,) 188 225 26 27 214 252 Medium entities (entre 50 y 150 m,) 13 12 38 45 51 57 Small institutions (<50 m) 4 3 92 94 96 97 TOTAL 205 240 156 166 361 406 47

INVESTMENT

AMOUNT (€M) BY TYPE OF ENTITY (GP) 2016 2017 2018 2019 International VC1 256.0 308.1 259.9 443.2 Domestic Private VC 150.3 185.2 227.8 239.8 Domestic Public VC 27.5 44.4 17.8 38.9 TOTAL 433.9 537.7 505.5 721.9 International PE2 2,494.9 3,282.7 4,322.3 6,271.3 Domestic Private PE 843.6 1,081.0 1,148.7 1,444.4 Domestic Public PE 36.6 56.5 36.8 89.3 TOTAL 3,375.2 4,420.2 5,507.9 7,805.0 International Entity (VC+PE) 2,751.0 3,590.8 4,582.2 6,714.5 Domestic Private Entity (VC+PE) 994.0 1,266.2 1,376.5 1,684.2 Domestic Public Entity (VC + PE) 64.2 100.9 54.6 128.2 TOTAL 3,809.1 4,957.9 6,013.4 8,526.9 NEW FOLLOW ONS New investments 3,490.3 4,128.2 5,098.4 6,467.6 Follow ons investments 318.8 829.7 915.0 2,059.3 TOTAL 3,809.1 4,957.9 6,013.4 8,526.9 STAGE OF DEVELOPMENT Seed 14.7 21.7 24.3 20.8 Startup 76.6 101.9 126.9 120.3 Other early stages 151.0 163.7 215.6 187.6 Late stage venture 191.5 250.3 138.7 393.1 Growth 734.5 590.3 658.7 647.8 Replacement 129.2 765.3 105.2 100.3 LBO/MBO/MBI/LBU 2,387.3 2,984.2 3,589.0 6,880.2 Others 124.2 80.5 1,155.0 176.7 TOTAL 3,809.1 4,957.9 6,013.4 8,526.9 INDUSTRY Computer related 310.6 380.0 382.9 619.8 Other Electronic related 1.5 1.9 0.9 2.1 Industrial Products & Services 346.4 257.0 146.1 879.0 Consumer-related Products 426.7 866.3 818.3 1,016.4 Agriculture 49.1 4.7 205.8 360.4 Energy 290.4 175.4 1,197.3 1,556.2 Chemistry & Materials 137.1 236.7 10.6 29.8 Construction 177.0 44.5 67.3 24.6 Health related 446.3 301.3 441.9 452.0 Leisure 58.6 91.1 151.2 667.5 Communications 358.8 72.9 1,031.0 166.3 Biotechnology 100.2 42.9 37.7 348.9 Industrial Automation 0.0 0.0 0.0 0.0 Financial Services 215.3 658.4 8.2 120.3 Other Services 819.5 798.0 960.5 2,160.7 Others 0.1 32.0 0.0 0.2 Transportation 50.6 679.8 40.8 105.0 Other Manufacturing 20.9 314.9 512.9 17.9 TOTAL 3,809.1 4,957.9 6,013.4 8,526.9

1 VC = Venture Capital 2 PE = Private Equity 48

INVESTMENT

AMOUNT (€M) REGION 2016 2017 2018 2019 Andalucía 53.0 58.7 159.5 388.9 Aragón 1.1 155.3 11.2 30.9 Asturias 41.9 36.1 13.8 7.2 Baleares 740.1 455.5 13.6 43.7 Canarias 0.0 3.8 27.3 21.6 Cantabria 0.0 0.0 0.0 1.0 Castilla-La Mancha 232.5 54.8 18.4 13.9 Castilla-León 42.2 45.7 137.2 106.1 Cataluña 742.9 1,040.5 1,756.1 1,065.5 Cdad, de Madrid 1,095.6 2,457.1 2,439.1 5,387.1 Cdad, Valenciana 242.2 232.7 232.1 784.2 Extremadura 30.7 3.9 20.9 38.4 Galicia 267.1 43.0 66.0 222.2 La Rioja 145.9 16.9 180.8 109.9 Murcia 43.4 308.3 36.4 13.9 Navarra 43.8 31.7 434.1 116.9 País Vasco 86.8 14.0 466.9 175.5 Ceuta/ Melilla 0.0 0.0 0.0 0.0 TOTAL 3,809.1 4,957.9 6,013.4 8,526.9 SIZE OF INVESTMENT 0 - 0.25 € millions 23.5 26.3 27.3 26.2 0.25 - 0.5 € millions 30.4 22.2 28.7 29.5 0.5 - 1 € millions 47.1 59.2 59.6 56.9 1 - 2.5 € millions 117.6 144.4 154.9 172.6 2.5 - 5 € millions 98.6 156.2 118.1 170.9 5 -10 € millions 131.9 231.8 303.2 281.2 10 - 15 € millions 168.0 150.0 218.3 238.7 15 - 20 € millions 149.8 177.2 229.3 152.1 20 - 25 € millions 126.1 266.6 192.5 200.7 25 - 50 € millions 601.0 559.9 525.6 986.9 50 - 75 € millions 164.2 67.4 312.2 491.5 75 - 100 € millions 0.0 177.4 80.0 0.0 More than 100 € million 2,150.9 2,919.3 3,763.7 5,719.8 TOTAL 3,809.1 4,957.9 6,013.4 8,526.9 Between 10 and 100 € million 1,209.1 1,398.5 1,557.8 2,069.9

COMPANY SIZE Private Equity Venture Capital Total 0 to 9 employees 117 204.3 321.3 10 to 19 employees 43 97.6 141.6 20 to 99 employees 551 229.9 781.9 100 to 199 employees 957 65.6 1,023.6 200 to 499 employees 1,560 74.4 1,634.4 500 to 999 employees 931 0.0 931 1.000 to 4.999 employees 1,180 50.0 1,230 More than 5.000 employees 2,466 0.0 2,466 TOTAL 7,805 721.8 8,529.8 49

INVESTMENT

NUMBER OF INVESTMENTS By type of entity (GP) 2016 2017 2018 2019 Internacional VC 43 63 84 91 Domestic Private VC 338 345 397 367 Domestic Public VC 108 152 107 130 TOTAL 489 560 588 588 Internacional PE 39 31 33 46 Domestic Private PE 69 107 106 86 Domestic Public PE 20 17 13 40 TOTAL 128 155 152 172 International Entity (VC+PE) 82 94 117 137 Domestic Private Entity (VC+PE) 407 452 503 453 Domestic Public Entity (VC + PE) 128 169 120 170 TOTAL 617 715 740 760 NEW - FOLLOW ONS New Investments 387 463 475 462 Follow ons investments 230 252 265 298 TOTAL 617 715 740 760 STAGE OF DEVELOPMENT Seed 87 123 97 75 Startup 176 202 231 204 Other early stages 165 151 178 196 Late stage venture 61 84 82 113 Expansion 74 92 96 90 Replacement 6 10 5 6 LBO/MBO/MBI/LBU 37 46 47 68 Others 11 7 4 8 TOTAL 617 715 740 760 INDUSTRY Computer related 256 286 318 306 Other Electronic related 5 6 6 5 Industrial Products & Services 50 53 51 67 Consumer-related Products 60 75 75 75 Agriculture 22 18 21 18 Energy 29 38 30 21 Chemistry & Materials 16 20 15 21 Construction 6 11 8 6 Health related 57 56 59 62 Leisure 7 10 16 18 Communications 17 20 17 15 Biotechnology 44 45 43 47 Industrial Automation - - 0 0 Financial Services 4 10 10 13 Other Services 28 43 46 60 Others 1 3 0 1 Transportation 7 10 8 15 Other Manufacturing 8 11 17 10 TOTAL 617 715 740 760 50

INVESTMENT

NUMBER OF INVESTMENTS REGION 2016 2017 2018 2019 Andalucía 11 15 17 20 Aragón 4 11 5 9 Asturias 18 33 17 13 Baleares 16 17 10 14 Canarias 1 1 1 4 Cantabria 0 0 0 2 Castilla-La Mancha 5 5 5 3 Castilla-León 24 23 48 51 Cataluña 192 213 220 226 Cdad. de Madrid 116 148 164 171 Cdad. Valenciana 46 32 57 53 Extremadura 9 3 5 5 Galicia 55 85 46 37 La Rioja 6 9 8 4 Murcia 10 11 9 8 Navarra 46 41 44 36 País Vasco 58 68 84 104 Ceuta/ Melilla 0 0 0 0 TOTAL 617 715 740 760 SIZE OF INVESTMENT 0 - 0,25 € millions 272 313 314 282 0,25 - 0,5 € millions 88 67 87 86 0,5 - 1 € millions 74 92 89 88 1 - 2,5 € millions 75 94 99 116 2,5 - 5 € millions 30 46 36 51 5 -10 € millions 18 34 43 43 10 - 15 € millions 15 13 18 20 15 - 20 € millions 9 10 14 9 20 - 25 € millions 6 12 9 9 25 - 50 € millions 18 18 16 28 50 - 75 € millions 3 1 5 9 75 - 100 € millions 0 2 1 0 More than 100 € million 9 13 9 19 TOTAL 617 715 740 760 Between 10 and 100 € million 51 56 63 75

COMPANY SIZE Private Equity Venture Capital Total 0 to 9 employees 15 281 296 10 to 19 employees 5 140 145 20 to 99 employees 52 135 187 100 to 199 employees 39 19 58 200 to 499 employees 21 12 33 500 to 999 employees 17 0 17 1,000 to 4,999 employees 15 1 16 More than 5,000 employees 8 0 8 TOTAL 172 588 760 51

TYPE OF INVESTMENT BY REGION IN 2019 Amount (M€) Other Late LBO / Seed Start-up eraly Stage Growth Replace- MBO / Others Total stages Venture ment MBI / LBU Madrid 5.7 58.4 46.0 99.5 171.2 16.9 4,840.2 149.2 5,387.1 Cataluña 4.4 38.9 81.0 260.7 109.4 12.7 556.7 1.6 1,065.5 Andalucía 0.1 0.8 1.8 0.0 10.8 49.6 323.4 2.5 388.9 País Vasco 0.7 6.5 11.3 14.9 57.0 12.1 73.1 0.0 175.5 Galicia 2.5 5.0 6.1 0.0 7.2 0.0 201.4 0.0 222.2 Castilla-León 6.7 4.0 0.4 3.7 30.3 0.0 40.4 20.5 106.1 Castilla-La Mancha 0.0 2.2 0.0 0.0 0.0 0.0 11.7 0.0 13.9 Aragón 0.0 0.1 0.0 1.0 28.0 0.0 1.7 0.0 30.9 Extremadura 0.0 0.3 0.1 0.0 1.5 0.0 36.1 0.5 38.4 Canarias 0.0 0.8 0.0 0.0 20.8 0.0 0.0 0.0 21.6 Navarra 0.0 1.0 1.2 7.7 70.5 0.0 36.4 0.0 116.9 Asturias 0.7 0.1 0.2 1.3 4.9 0.0 0.0 0.0 7.2 Comunidad Valenciana 0.0 2.8 12.7 0.7 130.4 0.0 636.7 0.9 784.2 Baleares 0.0 0.1 24.2 0.0 5.0 0.0 14.4 0.0 43.7 Murcia 0.0 0.0 1.0 3.7 3.0 0.0 6.2 0.0 13.9 Cantabria 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 1.0 La Rioja 0.0 0.0 0.0 0.0 6.0 0.0 103.8 0.0 109.9 Ceuta / Melilla 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TOTAL 20.8 120.9 187.0 393.1 656.3 91.3 6,882.3 175.2 8,526.9

TYPE OF INVESTMENT BY REGION IN 2019 Number of investments Other Late LBO / Seed Start-up eraly Stage Growth Replace- MBO / Others Total stages Venture ment MBI / LBU Madrid 19 39 39 26 19 2 26 1 171 Cataluña 18 70 75 40 12 2 7 2 226 Andalucía 1 2 5 0 4 1 6 1 20 País Vasco 14 49 19 15 4 1 2 0 104 Galicia 8 11 10 0 4 0 4 0 37 Castilla-León 12 10 3 5 18 0 1 2 51 Castilla-La Mancha 0 1 0 0 0 0 2 0 3 Aragón 0 1 0 4 3 0 1 0 9 Extremadura 0 1 1 0 1 0 1 1 5 Canarias 0 2 0 0 2 0 0 0 4 Navarra 0 7 8 13 7 0 1 0 36 Asturias 1 1 2 3 6 0 0 0 13 Comunidad Valenciana 0 9 19 4 7 0 13 1 53 Baleares 0 1 11 0 1 0 1 0 14 Murcia 1 0 2 3 1 0 1 0 8 Cantabria 0 0 2 0 0 0 0 0 2 La Rioja 1 0 0 0 1 0 2 0 4 Ceuta / Melilla 0 0 0 0 0 0 0 0 0 TOTAL 75 204 196 113 90 6 68 8 760 52 Venture Capital

INVESTMENT

AMOUNT (€M) NUMBER START UPS TYPE OF GP 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Internacional VC 158.1 401.3 256.0 308.1 259.9 443.2 38 73 43 63 84 91 Domestic Private VC 112.6 119.9 150.3 185.2 227.8 239.8 258 293 338 345 397 367 Domestic Public VC 21.5 27.0 27.5 44.4 17.8 38.9 53 107 108 152 107 130 TOTAL 292.2 548.2 433.8 537.7 505.5 721.9 349* 473* 489* 560* 588* 588* STAGE OF DEVELOPMENT Seed 12.8 18.5 14.7 21.7 24.3 20.8 52 66 82 118 95 71 Start-up 42.8 167.6 76.6 101.9 126.9 120.9 80 117 156 177 193 172 Other early stage 51.0 134.1 151.0 163.7 215.6 187.0 47 69 107 104 110 123 Later stage venture 185.6 228.0 191.5 250.3 138.7 393.1 55 66 47 50 61 65 TOTAL 292.2 548.2 433.8 537.6 505.5 721.8 234 318 392 449 459 431 SIZE 0 - 0.25 M€ 15.8 22.4 21.7 24.1 26.4 24.7 136 202 213 263 254 214 0.25 - 0.5 M€ 16.6 16.2 27.5 20.2 26.8 28.4 26 30 50 36 67 61 0.5 - 1 M€ 41.2 45.5 40.2 52.8 51.2 50.1 27 35 56 61 48 50 1 - 2.5 M€ 59.9 83.6 92.2 108.5 111.0 132.5 32 24 50 59 51 58 2.5 - 5 M€ 22.6 64.2 69.2 70.5 86.7 130.4 4 12 13 13 18 22 5 - 10 M€ 52.1 49.6 29.4 101.4 145.4 140.6 6 5 3 8 12 14 10 - 15 M€ 24.0 28.3 10.0 33.7 26.0 37.4 0 4 2 3 1 6 15 - 20 M€ 30.0 34.8 0.0 17.5 32.0 30.5 1 2 2 2 5 1 20 - 25 M€ 0.0 0.0 0.0 0.0 0.0 0.0 1 2 1 1 0 2 25 - 50 M€ 30.0 114.8 37.5 0.0 0.0 32.0 0 0 1 2 3 2 50 - 75 M€ 0.0 0.0 0.0 0.0 0.0 115.3 0 0 0 0 0 0 75 - 100 M€ 0.0 89.1 0.0 0.0 0.0 0.0 1 1 0 0 0 0 More than 100 M€ 0.0 0.0 106.2 109.0 0.0 0.0 0 1 1 1 0 1 TOTAL 292.2 548.5 433.9 537.7 505.5 721.9 234 318 392 449 459 431 INDUSTRY Life Sciences 31.2 49.3 62.3 66.9 67.5 72.5 48 51 56 60 54 52 Digital & Consumer 89.9 324.2 245.4 307.6 243.0 409.0 106 129 142 148 156 141 Industry and others 31.4 65.4 63.5 91.8 78.4 121.4 56 75 113 127 137 133 TIC 139.7 109.4 62.7 71.4 116.5 118.9 61 88 79 114 112 105 TOTAL 292.2 548.3 433.9 537.7 505.5 721.9 271 343 390 449 459 431 REGIONS Andalucía 4.2 7.2 4.6 4.2 1.1 2.7 14 16 8 7 6 7 Aragón 0.5 0.1 0.6 2.2 1.2 1.1 2 2 2 5 4 5 Asturias 2.9 1.6 2.1 7.2 1.4 2.3 12 9 12 28 9 7 Baleares 2.3 10.3 23.2 11.7 11.3 24.3 1 4 4 6 5 2 Canarias 0.0 0.1 0.0 0.0 0.0 0.8 1 2 1 0 0 1 Cantabria 0.0 0.0 0.0 0.0 0.0 1.0 0 0 0 0 0 1 Castilla-La Mancha 3.0 4.8 3.0 1.8 4.0 2.2 6 21 4 3 4 1 Castilla-León 4.8 2.7 12.0 25.9 24.5 14.8 9 7 18 16 24 27 Cataluña 172.4 342.4 144.3 201.8 228.8 385.1 75 88 105 115 125 129 Cdad, de Madrid 64.8 129.6 195.6 236.0 170.1 209.6 47 63 64 77 91 89 Cdad, Valenciana 10.1 20.1 4.7 3.6 31.9 16.2 19 16 32 23 38 28

* Number of investment 53

AMOUNT (€M) NUMBER START UPS REGIONS 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Extremadura 4.1 8.0 1.7 3.9 0.5 0.3 8 9 2 3 1 2 Galicia 2.7 4.8 10.8 17.7 5.4 13.6 12 26 46 55 37 20 La Rioja 0.0 0.3 0.1 0.3 0.2 0.0 0 1 1 4 3 1 Murcia 2.3 0.4 3.9 0.6 3.6 4.7 3 3 6 7 6 3 Navarra 8.9 6.0 14.7 13.8 6.2 9.9 11 15 36 37 31 23 País Vasco 9.0 10.1 12.7 7.1 15.2 33.3 14 36 51 63 75 85 Ceuta/ Melilla 0.0 0.0 0.0 0.0 0.0 0.0 0 0 0 0 0 0 TOTAL 292.2 548.3 433.9 537.7 505.5 721.9 234 318 392 449 459 431

DIVESTMENT

VOLUMEN (MILLONES €) NUMBER OF DIVESTMENTS EXIT WAY 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Owner/manager buy-back 40.1 41.8 27.2 24.5 14.7 39.2 46 38 36 18 23 19 Sale to PE & VCs 3.6 11.5 97.2 0.0 29.3 0.9 6 6 4 0 4 3 Trade sale 62.9 15.7 204.8 46.9 107.9 67.7 24 17 39 19 53 40 Stock Market 0.0 0.2 1.4 0.2 5.6 0.7 0 3 4 3 8 1 Write-offs 71.4 30.7 23.5 28.4 42.5 23.5 60 70 36 15 52 44 Repayment of loans 8.0 8.6 8.2 8.8 11.2 14.4 120 133 87 67 77 109 Others 8.0 6.3 1.5 4.4 2.1 76.7 12 14 22 8 3 9 TOTAL 194.0 114.8 363.8 113.2 213.3 223.1 268 281 228 130 220 225 STAGE OF DEVELOPMENT Seed 31.9 11.3 9.9 38.2 24.6 17.9 118 117 86 52 84 83 Start-up 130.2 62.9 116.6 18.7 92.7 41.1 114 113 88 40 77 94 Other early stage 8.1 19.5 25.7 8.9 60.1 51.4 19 36 40 17 36 24 Later stage venture 23.8 21.0 211.7 47.4 35.8 112.7 17 15 14 21 23 24 TOTAL 194.0 114.7 363.8 113.2 213.2 223.1 268 281 228 130 220 225

FUNDRAISING

AMOUNT (€M) TYPE OF LP 2014 2015 2016 2017 2018 2019 Financial institutions 65.3 37.9 110.0 6.0 9.7 60.2 Pension funds 32.8 23.6 15.0 9.9 15.9 13.7 Insurance Companies 1.0 6.0 16.7 6.4 2.5 79.3 Fund of funds 2.5 26.1 98.4 45.6 21.7 122.2 Corporate investors 87.5 40.2 30.5 27.6 27.1 108.1 Family office 41.8 75.4 179.3 84.2 89.0 284.8 Government agencies 112.0 82.0 98.3 79.1 11.1 111.1 Academic institutions 0.0 1.0 - - - - Stock Market 2.2 0.0 - - - - Others 7.2 14.1 20.8 25.0 6.0 18.3 Capital gains available for re-investment 6.4 0.0 - - - 0.0 TOTAL 358.8 306.5 569.0 283.6 182.9 797.7 54

DIVESTMENT (AMOUNT)

AMOUNT (M€) BY TYPE OF ENTITY (GP) 2016 2017 2018 2019 International Entity (VC+PE) 1,647.1 2,650.3 967.6 2,294.8 Domestic Private Entity (VC+PE) 650.1 798.3 1,044.8 593.8 Domestic Public Entity (VC + PE) 40 35 27 89 TOTAL 2,337.2 3,483.9 2,039.3 2,977.3 CONCEPTS Final Divestments 2,051.7 2,836.5 1,468.8 1,977.5 Partial Divestments 285.5 647.4 570.5 999.9 TOTAL 2,337.2 3,483.9 2,039.3 2,977.3 STAGE OF DEVELOPMENT Seed 9.9 38.2 24.6 17.9 Start-up 116.6 18.7 92.7 41.1 Other early stage 25.7 8.9 60.1 51.4 Later stage venture 211.7 60.9 35.8 112.7 Growth 336.3 570.9 440.2 683.2 Replacement 90.2 7.5 394.9 122.5 LBO/MBO/MBI/LBU 1,511.2 2,752.9 930.2 1,870.1 Otras 35.6 26.0 60.8 78.4 TOTAL 2,337.2 3,483.9 2,039.3 2,977.3 EXIT WAY Owner/manager buy-back 282.5 170.7 341.6 310.6 Sale to PE & VCs 293.2 594.4 686.0 984.8 Trade sale 1,183.7 1,522.8 538.7 840.2 Stock Market 244.1 426.8 244.1 281.1 Write-offs 91.7 186.5 63.4 52.5 Repayment of loans 95.0 304.2 44.0 392.7 Others 146.9 278.4 121.5 115.3 TOTAL 2,337.2 3,483.9 2,039.3 2,977.3 INDUSTRY Computer related 253.1 255.5 90.0 342.9 Other Electronic related 1.0 1.1 2.1 2.3 Industrial Products & Services 254.5 260.0 136.3 491.1 Consumer-related Products 216.1 439.6 613.1 330.1 Agriculture 21.2 5.2 12.9 45.8 Energy 375.6 389.5 110.6 281.5 Chemistry & Materials 4.3 4.9 78.9 49.1 Construction 66.6 38.2 5.5 30.3 Health related 53.3 896.5 86.7 259.3 Leisure 171.8 208.5 76.3 13.9 Communications 79.1 321.8 653.9 360.3 Biotechnology 18.5 10.9 15.6 74.2 Industrial Automation 0.0 0.0 0.0 0.0 Financial Services 560.3 64.4 0.0 3.0 Other Services 194.4 561.3 54.0 546.0 Others 16.4 24.2 6.2 2.0 Transportation 46.9 0.0 57.6 79.6 Other Manufacturing 4.0 2.3 39.5 65.9 TOTAL 2,337.2 3,483.9 2,039.2 2,977.3 55

DIVESTMENTS (NUMBER)

Nº DIVESTMENTS BY TYPE OF ENTITY (GP) 2016 2017 2018 2019 International Entity (VC+PE) 41 37 33 49 Domestic Private Entity (VC+PE) 181 144 222 150 Domestic Public Entity (VC + PE) 137 62 66 138 TOTAL 359 243 321 337 CONCEPTS Final Divestments 216 157 227 184 Partial Divestments 143 86 94 153 TOTAL 359 243 321 337 STAGE OF DEVELOPMENT Seed 86 52 84 83 Start-up 88 40 77 94 Other early stage 40 17 36 24 Later stage venture 14 23 23 24 Expansion 82 63 60 62 Replacement 12 2 7 4 LBO/MBO/MBI/LBU 31 43 23 34 Otras 6 3 11 12 TOTAL 359 243 321 337 EXIT WAY Owner/manager buy-back 72 43 45 35 Sale to PE & VCs 11 14 16 20 Trade sale 72 50 83 76 Stock Market 9 6 10 7 Write-offs 45 24 59 54 Repayment of loans 120 91 97 139 Others 30 15 11 6 TOTAL 359 243 321 337 Industry Computer related 88 69 115 89 Other Electronic related 8 4 4 5 Industrial Products & Services 43 41 43 39 Consumer-related Products 31 15 32 50 Agriculture 8 7 12 17 Energy 16 11 14 17 Chemistry & Materials 16 8 10 5 Construction 10 7 4 10 Health related 32 21 19 23 Leisure 12 5 7 6 Communications 15 11 15 14 Biotechnology 33 14 19 23 Industrial Automation - - 0 0 Financial Services 3 2 0 2 Other Services 33 21 10 17 Others 4 2 3 1 Transportation 4 - 8 7 Other Manufacturing 3 5 6 12 TOTAL 359 243 321 337 56

PORTFOLIO

AMOUNT (M€) BY TYPE OF ENTITY (GP) 2016 2017 2018 2019 International Entity (VC+PE) 11,004.3 12,193.4 15,898.2 20,554.8 Domestic Private Entity (VC+PE) 5,387.5 5,815.5 6,155.0 7,317.2 Domestic Public Entity (VC + PE) 841.0 904.2 937.3 994.9 TOTAL 17,232.8 18,913.2 22,990.4 28,866.9 INDUSTRY Computer related 1,778.3 1,917.6 2,088.8 2,598.4 Other Electronic related 197.7 198.4 197.3 21.1 Industrial Products & Services 2,540.6 2,472.0 2,281.3 2,475.2 Consumer-related Products 2,697.1 3,293.0 3,457.5 4,235.7 Agriculture 162.3 161.9 354.7 669.5 Energy 893.6 927.3 2,111.0 3,647.5 Chemistry & Materials 656.2 816.3 748.0 773.9 Construction 569.4 584.8 650.6 645.1 Health related 1,795.4 1,231.6 1,585.3 1,819.0 Leisure 1,152.5 822.3 893.3 1,546.8 Communications 1,285.2 1,073.7 1,536.1 1,329.6 Biotechnology 247.3 273.1 296.6 583.1 Industrial Automation 7.7 7.6 4.8 4.5 Financial Services 268.5 926.9 1,122.8 1,244.1 Other Services 2,607.6 2,874.8 3,808.4 5,401.9 Others 28.6 60.5 55.9 55.9 Transportation 255.8 868.7 857.3 901.6 Other Manufacturing 88.8 402.8 940.7 913.9 TOTAL 17,232.6 18,913.2 22,990.4 28,866.9 REGION Andalucía 561.1 592.8 490.2 877.4 Aragón 138.9 238.3 248.2 277.1 Asturias 216.6 237.4 208.4 172.4 Baleares 780.1 1,216.0 1,229.6 1,114.7 Canarias 3.4 7.2 34.5 55.5 Cantabria 56.0 56.0 48.1 45.6 Castilla-La Mancha 310.9 363.3 367.2 378.5 Castilla-León 252.6 216.4 339.8 397.8 Cataluña 3,881.5 4,628.6 5,672.8 6,230.3 Cdad, de Madrid 6,897.3 7,284.2 9,286.7 13,255.6 Cdad, Valenciana 1,000.4 957.5 1,357.7 1,951.1 Extremadura 450.5 452.6 470.1 493.0 Galicia 673.5 628.7 636.7 817.5 La Rioja 233.7 250.5 427.5 454.0 Murcia 126.9 371.3 407.6 406.7 Navarra 338.1 367.5 287.3 760.7 País Vasco 1,311.4 1,044.9 1,478.0 1,179.0 Ceuta/ Melilla 0.0 0.0 0.0 0.0 TOTAL 17,232.8 18,913.2 22,990.4 28,866.9 57

PORTFOLIO

NUMBER BY TYPE OF ENTITY (GP) 2016 2017 2018 2019 International Entity (VC+PE) 240 266 306 369 Domestic Private Entity (VC+PE) 1,275 1,463 1,621 1,788 Domestic Public Entity (VC + PE) 813 915 966 1,045 TOTAL 2,328 2,644 2,893 3,202 INDUSTRY Computer related 793 910 1,020 1,154 Other Electronic related 26 28 28 28 Industrial Products & Services 270 288 297 326 Consumer-related Products 209 257 294 325 Agriculture 56 63 72 81 Energy 110 138 151 157 Chemistry & Materials 60 66 70 82 Construction 40 44 48 50 Health related 147 172 191 206 Leisure 69 69 72 79 Communications 86 97 97 97 Biotechnology 176 183 189 202 Industrial Automation 20 20 19 18 Financial Services 23 32 37 47 Other Services 157 176 203 234 Others 16 19 17 17 Transportation 31 34 31 38 Other Manufacturing 39 48 57 61 TOTAL 2,328 2,644 2,893 3,202 REGION Andalucía 186 187 186 196 Aragón 38 39 42 47 Asturias 100 114 113 120 Baleares 25 33 34 38 Canarias 7 8 9 11 Cantabria 9 9 8 7 Castilla-La Mancha 70 72 75 75 Castilla-León 72 84 108 139 Cataluña 589 659 696 782 Cdad, de Madrid 380 425 492 566 Cdad, Valenciana 130 149 184 207 Extremadura 115 115 109 98 Galicia 231 286 304 319 La Rioja 15 22 27 27 Murcia 25 28 35 32 Navarra 92 116 123 135 País Vasco 244 298 348 403 Ceuta/ Melilla 0 0 0 0 TOTAL 2,328 2,644 2,893 3,202 58

INDUSTRY DESCRIPTION Production and/or distribution of computer equipment (computers. printers. scanners. sound IT: Hardware recognition. etc,)

IT: Internet Browsers. web portals. design or maintenance of web pages

IT: Semiconductors Semiconductors. transistors

IT: Software Production and/or distribution of software (operating systems. programs. developments. etc,)

IT: Services Data processing. maintenance of computer equipment. IT systems consulting and/or training

Other Electronic Batteries. fiber optics. analytical and scientific instruments

Industrial Products and Services Industrial machinery and equipment. industrial services. recycling and anti-pollution equipment

Consumer Goods: Retail Retail distribution of consumer goods and services. excluding leisure goods and services

Consumer Goods: Other Production and supply of consumer goods

Agriculture Agricultural crops. animal farming. fishing. forestry operations Exploration. extraction and production of gas and oil. coal products. energy conservation. alternative Energy energies

Chemicals/Plastics/Materials Chemical products for agriculture. plastics. materials. adhesives. enclosures

Construction Construction materials. construction services. prefabricated buildings Production of technologically advanced diagnostic and therapeutic treatment systems. related Healthcare: Instruments/Equipment services

Healthcare: Medical Care Health institutions. management of hospitals and clinics. help for the disabled. basic supplies

Healthcare: Pharmaceuticals Development. production and supply of medicines

Leisure Leisure and hospitality related products and services Data and voice transmission equipment. equipment for cable networks. mobile telephony and Communications: Hardware satellite

Communications: Carriers Cable. mobile and satellite telephone operators

Communications: Other Radio and TV broadcasters. media companies. publishing houses Agricultural and animal biotechnology. industrial biotechnology. equipment for biotechnology Biotechnology/Genetic Engineering research

Industrial measurement equipment. process control equipment. robotics. mechanical vision Industrial Automation/Robotics equipment. computerized control of machinery

Financial Services Banking. insurance. real estate services. stock brokerage Engineering services. advertising and public relations. distribution. import and export. consulting Other Services (excluding IT consulting)

Other (Specify) Mining. electrical. conglomerates Transportation Airlines. railways. buses. airport transport services. mail and parcel services Other Production Office furniture. plumbing supplies 59 60 Challenges and Opportunities in the Venture Capital and Private Equity Legal Landscape

Carlos Ferrer, Partner at Cuatrecasas. Jorge Canta, Partner at Cuatrecasas. Paz Irazusta, Senior Associate at Cuatrecasas.

egulation of venture capital and invest in managed vehicles should also be considered, private equity that helps promote as should corrections to certain aspects related to the the entrepreneurial environment and calculation of investment ratios, which could be improved Rcompanies at such a complicated time is needed to, in particular, take into account the investment cycle in now more than ever. Although the regulatory Venture Capital funds or funds of funds. environment has improved, there are still In addition, the dichotomy between fixed capital public certain dynamics from the past that need limited companies/funds has resulted in a very scarce to be addressed. History has taught us that selection of options for structuring investment vehicles. introducing small improvements to regulations In this regard, a more open vision is advisable, which and taxation can have a significant impact would allow for the use of limited partnerships and similar on this type of industry, which is so heavily structures or, at a minimum, those with variable capital, influenced by regulatory and tax elements. options that are widely spread in other neighboring countries. In any case, the simplicity with which a Venture The promotion of initiatives aimed at furthering integration Capital and Private Equity Fund (FCR) may be established between management companies and institutional should be transferred to Venture Capital and Private investors, such as the Guide of Best Practices published by Equity Companies (SCR), thus eliminating the requirement ASCRI, has created a growth environment for institutional of a minimum capital contribution of 1,200,000 euros investment in venture capital and private equity funds. for incorporation, reducing the mandatory contribution However, these investments, in particular by pension percentage to 10 per cent, in line with that required for funds and insurers, are far from that of our neighboring FCRs or undertakings for collective investment. countries. In this regard the elimination of certain investment barriers should undoubtedly be considered, As regards marketing, the nearly five years that have such as the requirement that waterfalls be included in passed since the regulatory reform have shown that the maximum fee limits for pension funds, which has applying the concept of a professional investor under considerably limited the investment by individual Pension MiFID to the venture capital and private equity sector Funds in this area. makes very little sense, especially as relates to the need to assess the number of transactions carried out during As an initial measure in the specific field of venture capital the last four quarters. Introducing the concept of a semi- and private equity, the granting of financing should no professional investor, adapted to investment in venture longer be stigmatized as beyond the regulation of venture capital and private equity, appears to be a valid option capital and private equity structures. Now more than ever, that weighs both the need for investor protection and the the granting of loans, in many cases linked to investment necessary access of individual investors to this industry. in companies, will be key to recovery, and therefore must be taken into account in the regulation. Both easing the Undoubtedly, the growth in the number of general current rules for the granting of loans in venture capital partners in recent years, particularly in the area of Venture and private equity firms and creating a specific closed-end Capital, warrants some reflection on the importance of vehicle to channel this type of assets would be welcome promoting this industry, which is at the forefront ofthe measures to ensure we remain competitive with our real economy. Venture capital and private equity may also neighboring countries, who have already implemented serve as the spearhead for foreign investment in Spain and such measures. This regulation is particularly necessary as as a center for talent attraction for managers who are able relates to investments in startups and SMEs. to find a stable and attractive environment for the creation of structures in Spain. Improvements that would allow for general partners to 61 Challenges and Opportunities in the Venture Capital and Private Equity Legal Landscape

Finally, it is worth reflecting on the European Long Term As regards the treatment of dividends, although the Investment Funds (ELTIFs) that have simply been ignored regime relaxes the general requirements for application by our regulation. At the time of its regulation bythe of the exemption for dividends from Spanish sources, it European Union, its impact was very small, but in recent maintains the requirement that proof be provided that years, these have been seen as a valid vehicle both for dividends arising in other jurisdictions have been taxed channeling institutional investors in a regulated vehicle abroad. This requirement should be eliminated precisely and for providing individual investors with access to long- to ensure the equal treatment of capital gains mentioned term diversified vehicles for their portfolio. above.

Taxation In those cases in which Spanish venture capital and private equity firms invest in other Spanish or foreign venture capital The tax improvements demanded by the sector in recent and private equity firms (Funds of Funds), one of the main years have been wide and varied. Although the vast obstacles faced by the Funds when it comes to complying majority of them refer to Management Companies and with their tax obligations is the lack of information from Funds in general, the specific features of the Funds of the entire investment chain. It is for this reason that we Funds structures make some such improvements, we dare believe that certain rules should be softened, not with say, an unavoidable necessity. respect to any investment, but with respect to those that The purpose of all the reforms proposed below is none other meet the mandatory investment ratio in accordance with than to try to bring the tax framework applicable to the the provisions of Article 14 of Law 22/2014. The reason is different players in the world of venture capital and private very simple: if the regulatory legislator and the CNMV, as equity in line with that of our neighboring countries and, supervisor, have already approved these investments, the in many cases, to obtain greater legal certainty. It should tax legislator should be aligned with them. be noted that, generally speaking, international venture • On the one hand, excluding application of the special capital and private equity vehicles are characterized for tax regime to income earned through a tax haven tax purposes by total neutrality, that is, by not adding tax should not be applicable when the income is earned costs to those existing in the jurisdiction of destination for through another venture capital and private equity the investments or investors. firm that is eligible for inclusion in the mandatory As regards the special tax regime applicable to Spanish investment ratio. venture capital and private equity firms for Corporate • On the other hand, those firms in which Spanish Income Tax purposes, the primary amendment would venture capital and private equity firms invest and involve equalizing and extending the tax treatment that meet the criteria established in Article 14 of Law applied to capital gains derived from investments of the 22/2014 such that they are taken or are eligible to mandatory investment ratio (99% exemption) to income be taken into account for calculating the mandatory earned on shareholder loans and other forms of financing investment ratio should not be included in the foreign granted by venture capital and private equity firms to their income allocation regime, given their similarity to portfolio companies pursuant to Law 22/2014. Spanish venture capital and private equity firms, to To the extent that the regulatory legislator allows the which this regime does not apply given that such firms indiscriminate use of any of these mechanisms for the pay Corporate Income Tax. At the time, the Directorate granting of financing, we see no reason that would General of Taxation agreed with this position, and justify different tax treatment, especially considering we hope that it maintains its position, as there is no the increasing limitations placed on the deductibility of reason for a change. financial expenses for the beneficiary of the financing granted by the venture capital and private equity vehicle. 62

Finally, in relation to the ELTIFs mentioned above, Or does it more closely represent employment income and, although the regional tax jurisdictions of Biscay and Alava if so, should the distorted effect of progressive taxation (in the Basque Country) have already included an express be corrected? This issue has already been resolved by the fiscal regulation, state-wide legislation in this regard is still autonomous regions of the Basque Country and Navarre missing. A clarification regarding this tax regime would act which, under different circumstances, have regulated as a clear driver for this type of firms. it adopting reasonable levels of taxation in line with our neighboring jurisdictions. In addition to the foregoing, management companies frequently participate in the risk of the business projects Given the positive reception of this regional initiative they manage, and may be required to undertake a significant throughout the sector, we hope, for the sake of maintaining investment using their own capital. Consequently, it is our competitiveness between autonomous regions and common for them to be entitled to compensation linked with the world's major financial hubs, that this same path to the profitability of the managed business, commonly will be followed at the state level or in the remaining referred to as “carried interest.” autonomous tax regions.

There is currently no nationwide regulation on taxation of carried interest. Should it be treated as a capital gain, as it is ultimately derived from an investment by the manager? 63 64 General Partners included in this survey

I. DOMESTIC PRIVATE VENTURE CAPITAL & PRIVATE 40. Soria Futuro, S.A. EQUITY ENTITIES (S.C.R) 41. Telefónica Open Future 1. Abacnest 42. Thalassa Capital Investments S.C.R, S.A. 2. All Iron Ventures 43. Torreal, S.C.R, S.A. 3. Amadeus Ventures 44. Unirisco Galicia S.C.R, S.A. 4. Angels Capital S.L. 45. Univen Capital, S.A, S.C.R. de Régimen Común 5. Atitlan Grupo Empresarial, S.L 46. Up Capital 6. Bonsai Venture Capital 47. Vigo Activo, S.C.R. de Régimen Simplificado, S.A. 7. BStartup II. DOMESTIC PUBLIC VENTURE CAPITAL & PRIVATE 8. Caja Burgos, Fundación Bancaria EQUITY ENTITIES (S.C.R) 9. Collins Capital Desarrollo S.C.R.-PYME, S.A. 1. CDTI, SICC 10. Compas Private Equity 2. INVERTEC (Societat Catalana d'Inversió en Empreses 11. Corporación Empresarial de Extremadura, S.A. de Base Tecnològica, S.A.) 12. Creas Impacto, FESE, SA 3. Sadim Inversiones 13. Easo Ventures S.C.R., S.A. 4. SEPI Desarrollo Empresarial, S.A. (SEPIDES) 14. Enagas Corporate Venture 5. Sociedad de Desarrollo de las Comarcas Mineras, 15. Fides Capital, S.C.R, S.A. S.A (SODECO) 16. FIT Inversión en Talento SCR de Régimen 6. Sociedad de Desarrollo Económico de Canarias, S.A. Simplificado S.L. (SODECAN) 17. Gat Technology Tecnología, Telecomunicaciones y 7. Sociedad de Desarrollo de Navarra, SA (SODENA) Movilidad 8. Sociedad para el Desarrollo Industrial de Aragón, 18. GoHub Ventures S.A. (SODIAR) 19. Grupo Intercom de Capital, S.C.R, S.A. 9. Sociedad para el Desarrollo Industrial de Castilla-La 20. Iberdrola Ventures - Perseo Mancha, S.A. (SODICAMAN) 21. Healthequity SCR, de Régimen Simplificado S.A. 10. Sociedad para el Desarrollo Industrial de 22. Indes Capital Extremadura, S.A. (SODIEX) 23. Innocells 11. Sociedad Regional de Promoción del Pdo. de 24. Integra Capital S.C.R, S.A. Asturias, S.A. (SRP) 25. Investing Profit Wisely 12. Start Up Capital Navarra 26. Landon Investments Sociedad de Capital Riesgo de Régimen Simplicado III. DOMESTIC PRIVATE VENTURE CAPITAL & PRIVATE 27. Mutua Madrileña EQUITY ENTITIES (S.G.E.C.R.) 28. Murcia Emprende Sociedad de Capital Riesgo, S.A. 1. Abac Capital 29. Navarra Iniciativas Empresariales, S.A (Genera) 2. Active Venture Partners, S.G.E.I.C, S.A. 30. Nero Ventures 3. Adara Venture Partners 31. Onza Venture Capital Investments Régimen 4. Addquity Growth Capital, S.A. Simplificado S.A. 5. Ade Gestión Sodical S.G.E.I.C, S.A. 32. Prosegur Tech Ventures 6. Alantra Private Equity S.G.E.I.C, S.A. 33. Quarza Inversiones, S.A. 7. Alma Mundi Ventures, S.G.E.I.C, S.A. 34. Repsol Energy Ventures 8. Alta Life Sciences 35. Ricari, Desarrollo de Inversiones Riojanas S.A. 9. Alter Capital Desarrollo S.G.E.I.C, S.A. 36. Sinensis Seed Capital SCR, S.A 10. Ambar Capital y Expansión S.G.E.I.C S.A. 37. Santander Innoventures 11. Artá Capital S.G.E.I.C, S.A. 38. SeedRocket 4Founders Capital S.A, S.C.R-Pyme 12. Asabys Partners 39. Segtech Ventures (Prosegur) 13. Athos Capital, S.G.E.I.C, S.A. 65 General Partners included in this survey

14. Atlas Capital Private Equity S.G.E.I.C, S.A. 57. Nekko Capital, S.G.E.I.C, S.A. 15. Aurica Capital Desarrollo, S.G.E.I.C, S.A.U. 58. Neotec Capital Riesgo 16. Avet Ventures S.G.E.I.C, S.A. 59. Nexxus Iberia, S.G.E.I.C, S.A. 17. Axón Capital e Inversiones S.G.E.I.C, S.A. 60. Ona Capital 18. Bankinter Capital Riesgo, S.G.E.I.C. (Intergestora) 61. Oquendo Capital 19. Baring Private Equity Partners España, S.A. 62. PHI Industrial Acquisitions 20. Beable Capital S.G.E.I.C, S.A. 63. Portobello Capital Gestión, S.G.E.I.C, S.A. 21. Bewater Asset Management S.G.E.I.C S.A. 64. Proa Capital S.G.E.I.C, S.A. 22. Big Sur Ventures, S.G.E.I.C., S.A. 65. Qualitas Equity Partners 23. Black Toro Capital Partners LLP 66. Realza Capital. S.G.E.I.C, S.A. 24. Bullnet Gestión, S.G.E.I.C, S.A. 67. Renertia Investment Company S.G.E.I.C, S.A. 25. Caixa Capital Risc S.G.E.I.C, S.A. 68. Riva y García Gestión, S.A. 26. Cantabria Capital S.G.E.I.C, S.A 69. Sabadell Venture Capital 27. Clave Mayor S.G.E.I.C, S.A. 70. Samaipata Ventures 28. Columbus Venture Partners, S.G.E.I.C., S.A. 71. Seaya Ventures 29. Corpfin Capital Asesores, S.A, S.G.E.I.C. 72. Santander Private Equity S.G.E.I.C. 30. CRB Inverbío S.G.E.I.C. 73. SES Iberia Private Equity, S.A. 31. CVP Asset Management, S.G.E.I.C, S.A. 74. Sherpa Capital, S.G.E.I.C, S.A. 32. Decenes Mecenes S.G.E.I.C, S.A. 75. SI Capital R&S I S.A, S.C.R. de Régimen Simplificado 33. Diana Capital, S.G.E.I.C, S.A. 76. Swanlaab Venture Factory, S.G.E.I.C, S.A. 34. Eland Private Equity S.G.E.I.C, S.A 77. Suma Capital, S.G.E.I.C, S.A. 35. Encomenda Smart Capital 78. Taiga Mistral de Inversiones 36. Endurance Equity Partners, S.G.E.I.C, S.A. 79. Talde Gestión S.G.E.I.C, S.A. 37. Espiga Capital Gestión S.G.E.I.C, S.A 80. Telegraph Hill Capital 38. Finaves 81. Thesan Capital 39. Formentor Capital 82. Torsa Capital, S.G.E.I.C, S.A. 40. Gala Capital Desarrollo 83. Uninvest, S.G.E.I.C, S.A. 41. GED Iberian Private Equity, S.G.E.I.C, S.A. 84. Venturcap 42. Going Investment Gestión, S.G.E.I.C, S.A. 85. Victoria Venture Capital 43. GPF Capital 86. Ysios Capital Partners, S.G.E.I.C, S.A. 44. Hiperion Capital Management, S.G.E.I.C, S.A. 45. Inveready Technology Investment Group IV. DOMESTIC PUBLIC VENTURE CAPITAL & PRIVATE EQUITY ENTITIES (S.G.E.C.R) 46. JB Capital Markets, S.V., S.A. 47. JME Venture Capital, S.G.E.I.C, S.A. (antes Fundación 1. AXIS Participaciones Empresariales, S.G.E.I.C, S.A. Entrecanales) 2. Cofides 48. Kanoar Ventures, S.G.E.I.C, S.A. 3. Extremadura Avante Inversiones (antes Sociedad de 49. Kibo Ventures Partners Fomento Industrial de Extremadura) 50. Magnum Industrial Partners 4. Gestión de Capital Riesgo del País Vasco, S.G.E.I.C. 51. MCH Private Equity, S.A. 5. Innova Venture, SGEIC, SA (antes Invercaria Gestión) 52. Meridia Capital Partners, S.G.E.I.C, S.A. 6. Institut Català de Finances Capital, S.G.E.I.C, S. A. 53. Miura Private Equity 7. Seed Capital de Bizkaia, S.G.E.I.C, S.A. 54. Moira Capital Partners, S.G.E.I.C, S.A. 8. XesGalicia, S.G.E.I.C, S.A. 55. Nauta Capital VC Partners 56. Nazca Capital, S.G.E.C.R, S.A. 66

V. INTERNATIONAL VENTURE CAPITAL & PRIVATE 17. Forbion Capital Partners EQUITY ENTITIES WITH OFFICE IN SPAIN 18. General Atlantic 1. Acon Southern Europe Advisory 19. Gilde Healthcare Partners 2. Ardian 20. Greycroft 3. Advent International Advisory, S.L. 21. Idinvest Partners 4. Aurelius 22. Index Ventures 5. Bridgepoint 23. Insight Venture Partners 6. Capzanine 24. Institutional Venture Partners 7. Cinven 25. Investcorp 8. Charme Capital Partners S.G.R, S.P.A. 26. Kleiner Perkins C&B 9. CVC Capital Partners Limited 27. Kurma Partners 10. Demeter Partners 28. Lakestar 11. EQT Partners 29. L Catternon Europe (antes L Capital) 12. Ergon Capital 30. London Venture Partners 13. Harvard Investment Group Capital (HIG) 31. Mangrove 14. Intermediate Capital Group (ICG) 32. Milano Investment Partners (MIP) 15. Investindustrial Advisors, S.A. 33. Naspers Limited 16. JZ International 34. New Enterprise Associates 17. Kohlberg Kravis Roberts (KKR) 35. Northzone 18. MBO Partenaires 36. Otium Capital (antes Smart Ventures) 19. PAI Partners 37. Palamon Capital Partners 20. Permira Asesores 38. Partech Ventures 21. Riverside España Partners, S.L. 39. Partners Group 22. The Carlyle Group España, S.L. 40. Passion_Capital 41. Platinum Equity VI. INTERNATIONAL VENTURE CAPITAL & PRIVATE 42. Prime Ventures EQUITY FIRMS WITHOUT OFFICE IN SPAIN 43. Providence Equity (RECURRENT ACTIVITY) 44. Spark Capital 1. 14W 45. Stage 1 Ventures 2. Accel Partners 46. TA Associates 3. Apax Partners España, S.A. 47. Tiger Global Management 4. Atomico 48. Trident Capital 5. Balderton Capital 49. Trilantic Partners 6. BC Partners 50. Warburg Pincus 7. Bertelsmann SE & Co 8. Breega VII. INTERNATIONAL VENTURE CAPITAL & PRIVATE 9. Canada Pension Plan Investment Board (CPPIB) EQUITY WITHOUT OFFICE IN SPAIN (NON 1 10. CCMP Capital Advisors RECURRENT ACTIVITY) 11. Cerberus Capital 1. 42Cap 12. Digital Sky Technologies 2. 123 Investment Managers 13. Edmon de Rothschild I.P. 3. 360 Capital 14. Elaia Partners 4. Adams Street Partners 15. Entrée Capital 5. Adventure 16. E.Ventures 6. Alchemy Capital Management 67

7. Alpinvest 50. Eurazeo 8. Apex Capital Partners 51. Expon Capital 9. Altpoint Capital 52. Felicis Ventures 10. Amadeus Capital Partners 53. Fidelity Growth Partners Europe 11. Amplo 54. FJ Labs 12. Anthemis Group 55. FUND+ 13. ArcLight Capital Partners 56. General Atlantic 14. Ardian 57. GGM Capital 15. Avalon Ventures 58. GGV Capital 16. Avenue Capital Group 59. Global Founders 17. AXA Strategic Ventures 60. Goodwater Capital 18. Bain Capital 61. GP Bullhound Asset Management 19. Bahrain Mumtalakat Holding 62. Gr Capital 20. Baxter Ventures 63. Hellman & Friedman 21. BC Partners 64. Holtzbrinck 22. Benhamou Global Ventures (BGV) 65. Horizon Ventures 23. Bessemer Venture Partners 66. HR Ventures 24. Boehringer Ingelheim 67. IDC Ventures 25. Boston Seed Capital 68. Industry Ventures 26. BPO Capital GmbH & Co 69. Initial Capital 27. Brighteye Ventures 70. Innogest Capital 28. Bruckmann, Rosser, Sherrill & Co 71. Intel Capital 29. C5 Capital 72. Jackson Square Ventures 30. Castel Capital 73. JJDC Innovation 31. Cathay 74. Keensight Capital 32. Cell Innovation Partners 75. Khosla Ventures 33. Chiesi Ventures 76. Korelya Capital 34. Cipio Partners 77. L Capital Asia 35. Cisco Investments 78. Level Equity 36. Connect Ventures 79. Liil Ventures 37. Correlation Ventures 80. LocalGlobe LLP 38. Data Collective VC 81. Lone Star 39. Dawn Capital 82. Lundbeckfond Ventures 40. DN Capital 83. Magenta Partners 41. Delta Partners Group 84. Maniv Mobility 42. Dila Capital 85. Market One Capital 43. Docomo Ventures 86. Maveron 44. Early Bird 87. Middleland Capital 45. Eight Road Ventures 88. MMC Ventures 46. Emerige Societe par Accions Simplifiee 89. Monsanto Growth Ventures 47. Endeavor 90. Mountain Nazca 48. EQT Partners 91. Mubadala Capital 49. Evolvere Capital 92. Nokia Growth Partners

1 In 2019 there were 43 other international investors whose name are confidential althought their aggregate activity is reflected in this survey. 68

93. Oakley Capital Limited 136. Sunstone Capital A/S 94. Omega 137. TA Ventures 95. OpCapita 138. Target Global 96. Open Ocean 139. TC Growth Partners 97. Optimizer Invest 140. Techstars Ventures 98. Orient Hontai Capital 141. Ten Eleven Ventures 99. Oxford Capital Partners 142. Tekton Ventures 100. P101 143. Theventure.city 101. Paine Schwartz Partners, LLC 144. Three Hills Capital Partners 102. Philips N.V. 145. Top Tier Capital 103. Peninsula Capital 146. Toro Ventures 104. Pillar 147. TowerBrook Capital Partners 105. Platinum Equity 148. UL Invest 106. Point Nine Capital 149. Variv Capital 107. QED Investors 150. Vista Equity Partners 108. Quadrille Capital 151. Vulcan Capital 109. Qualcomm 152. Vy Capital 110. Randstad 153. Yabeo 111. Rakuten Inc. 112. Redalpine Ventures VIII. ENTITIES THAT CEASED ACTIVITY 113. Reach Capital 1. 3i Europe plc (Sucursal en España) 114. Roche Venture Fund 2. Coral Group 115. Rocket Internet 3. Debiopharm IF 116. Rhone Capital LLC 4. DLJ South American Partners 117. Rose Tech Ventures 5. EBN Capital S.G.E.I.C, S.A. 118. Rothenberg Ventures 6. Najeti Capital, S.C.R, S.A. 119. RTAventures 7. Next Capital Partners, S.G.E.I.C, S.A 120. Sambrinvest 8. Pontifax 121. SalesForce Ventures 9. Quantum Capital Partners AG 122. Sandton Capital 10. Sequoia Capital 123. Slack Fund 11. Serena Capital 124. Sapphire Ventures (antes SAP Ventures) 12. Sonae Ventures 125. Scale Capital (antes Inversur Capital) 13. Springwater Capital 126. Scope Capital Advisory 14. Sun Capital 127. Seroba Life Sciences 15. Triton Investment Advisers 128. Sigma Partners IX. ENTITIES THAT START THEIR ACTIVITY IN SPAIN IN 129. SK Capital Partners 20182 Skyline Management LLC 130. 1. 42Cap Société Régionale d’Investissement de Wallonie 131. 2. Alpinvest (S.R.I.W.) 3. Apex Capital Partners 132. SoftBank 4. Asabys Partners 133. Spark Capital Partners 5. Bahrain Mumtalakat Holding 134. Speedinvest 6. Big Sur Ventures, S.G.E.I.C., S.A. 135. StepStone Group 69

7. BPO Capital GmbH & Co 8. Brighteye Ventures 9. Castel Capital 10. CDTI, SICC 11. Cipio Partners 12. Columbus Venture Partners, S.G.E.I.C., S.A. 13. Dawn Capital 14. DN Capital 15. Easo Ventures S.C.R., S.A. 16. Expon Capital 17. Felicis Ventures 18. FJ Labs 19. Global Founders 20. Goodwater Capital 21. IDC Ventures 22. Invivo Capital Partners, S.G.E.I.C., S.A. 23. Keensight Capital 24. Khosla Ventures 25. Korelya Capital 26. Lakestar 27. Maniv Mobility 28. MMC Ventures 29. Mubadala Capital 30. Mutua Madrileña 31. Oakley Capital Limited 32. Optimizer Invest 33. Paine Schwartz Partners, LLC 34. Pillar 35. Quarza Inversiones, S.A. 36. Quadrille Capital 37. Queka Real Partners 38. Redalpine Ventures 39. Rhone Capital LLC 40. Slack Fund 41. Speedinvest 42. TA Ventures 43. Ten Eleven Ventures 44. Three Hills Capital Partners 45. Vista Equity Partners 46. Yabeo

2 To those 46 incorporations in the Private Equity & Venture Capital market , we should add several international investors whose name are confidential although their aggregate activity in 2019 is reflected in this survey. 70 Notes 71 Notes 72 Notes CUBIERTA-INFORME-2020-engl.pdf 2 23/7/20 12:07

CY 2020

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K SURVEY Venture Capital & Private Equity activity in Spain

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SURVEY Venture Capital & Private Equity activity in Spain 2020

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