“Big Spanish companies are still very afraid of buying startups” Aquilino Peña, Kibo Ventures

Category: Interviews

Aquilino PeñaJavier Torremocha and José María Amusátegui are the three founding partners of Kibo Ventures, one of the most active Venture Capital firms in Spain in the past few months. The Madrid-based firm backed at least 7 companies in the first half of 2014, according to our data, and also participated in jobandtalent’s $14 million Series A announced in July.

To know more about Kibo -the type of companies they invest, how much and the sectors they are interested in- we’ve interviewed Aquilino.

When was Kibo Ventures founded and what led you to raise your first fund?

We had been investing as business angels since 1999 (in almost 30 companies), so creating an institutional fund was the natural next step. In 2011 we found a lot of talent looking for funding but the market was extremely fragmented and, with few exceptions, little institutionalized. At the same time, we reeived some interest from institutional investors that wanted to have exposure in the technology sector.

It was a tough time to raise a fund to invest in internet companies, early stage and in Spain. But with the initial support of CDTI and Telefónica we managed to attract the attention of a very small and select group of highly skilled investors.

Back then we also realised that a fund with the characteristics of Kibo Ventures could attract the best entrepreneurs through a “super angel” approach: closer to the entrepreneur than more traditional funds, with an international profile and deep knowledge of the industry and ecosystem.

What types of companies does Kibo Ventures invest in?

Kibo Ventures invests in early stage companies with high growth potential, exceptional teams and good ideas. We only invest in digital businesses, based on the internet and mobile platforms. We like to say we are the first institutional investors after the business angels. Very occasionally we might invest in startups at a very early stage -such as Omnidrone, Notegraphy, MediaSmart- or in more mature companies that we consider we can help in its development, like peerTransfer.

Almost one third of our portfolio companies are based in the US. But every single company we invest in has a ‘Spanish angle’ Aquilino Peña

We invest both in Spain and abroad and almost one third of our portfolio companies are based in the US. But every single company we invest in has a ‘Spanish angle’; either because the technology is developed in Spain, the founders are Spanish or the target markets are Hispanic.

Our investment tickets go from €500k to €1 million and may reach €5 million per company, if the growth is there.

Which sectors are you interested in?

We invest in internet-based businesses and/or mobile platforms; within that scope we look at companies in any industry. Given the stage of development of Spain’s VC industry, there’s no room for vertical funds or firms.

In our portfolio we have a large variety of sectors, from e-commerce to gaming, also including online marketing, payments or cybersecurity. But for us the most important thing is a strong team with an idea, rather than a particular sector.

kibo ventures

You’ve invested in two interesting sectors: fintech and tourism. What’s your opinion on these industries?

We are very interested in how Spanish entrepreneurs are evolving, becoming more ambitious and global. These and other factors contribute to making our country more attractive to international VCs, who are then interested in investing with us in certain companies. They are attracted by the quality of Spanish engineers; they are much more faithful and cost-effective than in other regions.

When it comes to sectors, fintech is an area where there should be much more innovation. We need to go much further than online banking. There have been some disruptive evolutions in payments, P2P or SME loans and currency exchange, but the broader banking business still needs to be disrupted, revolutionized.

We love the tourism business. We invested in Blink -acquired by Groupon- and we are now the lead investors in Minube and Trip4Real. Spain is a world power in tourism and we have a very sophisticated industry, both on and offline, with great talent and we think it’s just a matter of time that more leading companies from our country come to market.

According to our data, the total invested in Spanish startups in the 1st half of 2014 grew significantly compared to 2013. What’s your opinion on the evolution of the Spanish VC market in recent years?

First and foremost, we think there’s a lot more money than before. These days it’s very hard for a good project to not get funding from local investors.

This has a lot to do with good VCs receiving support from public institutions (ICO) and from corporates, who are investing in the sector (for example our investors Telefónica). Investors are also becoming more professional; however, the industry is still small and we’d like to see more players competing in the market.

In which ways can the Spanish VC industry continue to evolve in coming years?

We’d like to see more pension funds invest in venture capital assets on a regular basis. And above all, it’d be good for the whole ecosystem if big traditional businesses and enterprises opt to buy other companies to manage their innovation and portfolios. We feel like Spanish big companies are still very afraid of buying and integrating startups.

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