ENGLISH EDITION Startup Financing in Spain. 2015 (VC, Business Angels, Accelerators, Loans) SPONSORED BY - - WEBCAPITALRIESGO Copyright © 2015, Webcaprisk Servicios, S.L. Total or partial reproduction of this document is strictly forbidden, as is its manipulation with software or transmission in any form via any medium, be it electronic, through photo- copying or other means without the previous permission of the Copyright holder. Access to Startup Financing in Spain. 2015 report is free at www.webcapitalriesgo.com; this may not be made available to the public through any other means, electronic or written, without the written permission of the rights holder. Any infringiment of the above rights will be liable to claims presented before the Madrid Courts (Spain). Startup Financing in Spain. 2015. June 2015. Release 1.0 Webcaprisk Servicios S.L. is the owner of www.webcapitalriesgo.com - 2 - WEBCAPITALRIESGO INTRODUCTION The financing of high-growth, high-potential and mostly early stage firms shows a persis- tent positive evolution in Spain. Startup firms have now access to several sources of long- term financing such as subsidized and participative loans granted by public-sector institu- tions (e.g., CDTI, ENISA and other similar institutions), domestic and international ventu- re capital firms (VCFs), and organized Business Angels, accelerators, incubators and simi- lar entities. International funds continued to show a noticeable interest in investing in our country. If in 2013 17 funds (an historical maximum) invested in Spain for the first time, last year there were 14. These are amazing figures when we bear in mind that in the years prior to this the average was around 5. Now Spain can be truly said to be on the map. The sector has also been shaken up by the arrival of the fund of funds FOND-ICO Global, acting as a lever for private national funds to be able to close out their new investment vehicles. Moreover, moderation continues to be the word in the activity of CDTI, ENISA and other regional institutions specializing in loans to small and medium-sized firms, which reached its peak in 2012. All these factors and some others, augur a very interesting future. The report Startup Financing in Spain. 2015, also includes: summary, list of investors (with portfolio and assets for that year), analysis and statistics1 and 182 related news items2. We wish to thank the contributions made by the sponsors of this report, Adara Venture Partners, Repsol Energy Ventures, Sitka Capital and Axon Partners Group Investment, as well as the support from Bridgepoint in helping to maintain webcapitalriesgo.com. Marcos Salas de la Hera Partner at Webcapitalriesgo.com 1. The information supplied by more than 250 investors was obtained by Webcapitalriesgo.com, in conjunction with the Asociación Española de Entidades de Capital Riesgo (ASCRI), and constitute the basis for the ellaboration of the official VC and Private Equity statistics published in the ASCRI’s 2014 Annual Report. The activity in startups (Venture Capital) was separated from the general information. 2. The information comes from the press briefings sent by investors and news items published in the media. - 3 - WEBCAPITALRIESGO INDEX PAGE Executive Summary 5 Global funding received by companies in early stage and entrepreneurs 7 Investment activity by national and international Venture Capital firms 9 Activity of groups of Business Angels and Accelerator-Incubators 11 Activity of CDTI, Enisa and other regional-sized entities 15 List of Domestic Private-Public and International VC Investors in 2014 18 66 VC investors and 31BA, Accelerators/Incubators and Other, conducted at least one initial investment in 2014 Deals’ News 182 News related to Investment, Divestment and Fundraising in 2014 21 - 4 - WEBCAPITALRIESGO EXECUTIVE SUMMARY Global financing received The total amount3 received by startups in Spain increased by 26% in 2014 to €347 million. In contrast, the number of deals decreased by 16.3% to 1,057, basically due to the reduction in the number of loans granted by CDTI, ENISA and similar institutions. Contribution of domestic and international VCFs At the end of 2014, we see a rise in investment of rather more than €100 million to reach €280.1 million resulting from the increased contribution from international funds with a €153.5 million investment (+69%). However, somewhat more than half of that amount invested was concentrated in the last round carried out in Scytl, one of the greatest ever to take place in Spain. Other significant deals during the year were Social Point or STAT-Diagnóstica, among others. Domestic VC firms invested €127.2 million. There was a 6.6% fall to 313 in the number of deals. Private national VCs carried out 235 transactions (75%). The average amount invested in each deal increased by 72% last year to €895,000. Rather more than half of investments carried out in 2014 were for less than €250,000. At the other extreme, the €10 million ba- rrier was breached, with 5 deals. Altogether, 66 investors made at least one new deal. Last year 14 international and two national funds carried out their maiden investment. When we analyze the activities of firms with VC backing, depending upon the development stage, a slight rise was seen in seed firm investments, and a historic high was attained in those related to Late Sta- ge venture. On the contrary, there was a fallback in deals in Startup and in the following (Other Early Stage). The sectoral category Information technologies raised 76% of the amount invested and 59% of the num- ber of deals. The amount of divestments at cost fell by 4% to €161.3 million in 2014, accompanied by a 23% drop in the number of final divestments to 134. Although there were relatively few divestments through indus- trial sales, namely 20, some were significant such as Trovit, Anafocus or ClickDelivery. Nevertheless, maybe the year´s most profitable divestment was the partial exit of Cabiedes in Blabacar through a third party sale to another venture capital firm. As was to be expected, the fund of funds FONDO-ICO Global fomented activity in raising new VC funds in 2014. In total, the number of new funds taken on showed a 34% increase to €378.5 million. Some of the funds that took off in 2014 were Caixa Capital TIC II, Axon ICT III, Cabiedes & Partners IV SCR, Ysios Biofund Innvierte FCR or Basque FCR, among others. 3 Including investments from domestic and international VC firms (VCFs), loans granted by public-sector institutions (CDTI, ENISA and simi- lar institutions) and organized groups of business angels, accelerators, incubators and similar entities. - 5 - WEBCAPITALRIESGO Contribution of organized groups of business angels, accelerators, incubators and simi- lar entities The amount invested by these agents increased by 18.4% to €22.7 million in 2014. The number of deals decreased slightly (-3.6%) to 323, of which 282 were initial investments (€73,000 per deal on average). 96% of the investments did not exceed the €250,000 threshold and 70% not event the €75,000 threshold. 31 players completed at least one initial investment in 2014, two more than in 2013. Among the Invest- ments to be highlighted we should mention Novicap, Finanzarel, A Crowd of Monsters, Green Momit or JobandTalent, among others. We also recorded 24 final exits, which at cost had a value of €2.5 million. In 13 of them the investment was written-off whereas in four there was a trade sale: Comenta TV, Ducksboard, Dexma Sensors and Saluspot. Contribution of CDTI, ENISA and other similar institutions Investment in loans granted by CDTI, Enisa and other regional-sized institutions to firms who found themselves in early stages rose to €48.9 million in 2014, which represents a 37% drop compared to the amount recorded a year before. Though the number of loans was also affected with a 25% fall to 552 loans, it should not be forgotten that this figure represents 43.3% of the global number of VC deals in Spain last year. The active loan portfolio in firms at the initial stages produced a total of €404.5 million, shared out amongst 2,979 firms as of December 31, 2014. - 6 - WEBCAPITALRIESGO Global funding received by companies in early stage and entrepreneurs The total amount received by startups in Spain, including investments from domestic and international VCFs4, loans granted by public-sector institutions (CDTI, ENISA and similar institutions) and organized groups of business angels, accelerators, incubators and similar entities, was estimated at €347 million in 2014. This represents 26% more than in 2013 (€184.3 million). As shown in Table 1, the reduction in the amounts committed by public-sector institutions contrasts with the increased activity of VCFs. However, the number of investments registered for all these entities fell by 14% to 1.275. This fall mate- rialized to a great extent in the number of loans granted by the above-mentioned public entities, which showed a 25% drop, to 552 in 2014. On the contrary the level of deals by national and international VCs and the BA group of Accelerators and incubators fell only slightly. Table 1 Amount committed by investor type Amount (€ Million) % Type of investor 2012 2013 2014 2012 2013 2014 Domestic and International VC 191.9 184.3 280.1 65.8% 66.9% 80.7% CDTI, Enisa and regional entities 92.7 77.2 48.9 31.8% 28.0% 14.1% BA Groups, Accelerators, Other 7 13.8 17.9 2.4% 5.0% 5.2% Total 291.6 275.3 346.9 100.0% 100.0% 100.0% Source: ASCRI/www.webcapitalriesgo.com. The number of deals registered for all these bodies fell by 16.3% to 1.057.