Although startup valuations have fallen since the 2021-22 surge, a factor that has severely hurt the European startup ecosystem, there is one region in Europe where the correction has worked a little in its favor: the South.
Evidence of this was evident during the Mobile World Congress in Barcelona earlier this year, where a TechCrunch reporter repeatedly bumped into Northern European venture capital funds scouting startups in the “Iberian Peninsula” (Spain and Portugal). These startups offer a great combination that venture capitalists love: much lower operating costs and much less aggressive valuations.
Further evidence of this “Southern trend” arrives with news of the establishment of a new venture capital fund, In addition to partners, was launched by Enrique Linares, one of the founders of the leading European unicorn, along with Oriol Juncosa, a veteran of Barcelona’s venture capital scene. While Plus Partners has not released a figure for the launch of its new fund, rumors I’m hearing are that it will be in the $30 million to $50 million range.
Looking at the fund’s co-founders, Linares led Letgo, a flea market, to become the first Spanish startup to achieve unicorn status, attracting investments from Accel, Insight Partners and Prosus, among others. Before leaving, he co-founded Captalis, a fintech company with a significant presence in Latin America.
While Juncosa began his venture capital career at Nauta Capital in Barcelona and went on to found early-stage venture capital firm Encomenda Smart Capital. He then became CFO of Carto, a data visualization SaaS company based in the US and Spain, which raised more than $100 million. As an investor/shareholder, he has invested in over 75 startups – such as Carto, Cobee (which spun out to Pluxee), Holded, My house Among other things.
So, what is Plus Partners’ thesis? It will focus on “health and nutrition,” “finance and real estate,” and “the future of work and productivity,” according to Juncosa. The fund will focus on pre-seed and seed stage startups in Southern Europe, a large proportion of which come from Spain.
Juncosa told me the fund is backed by founders and former C-level executives drawn from companies including Carto, Luzia, Kantox, Redpoints and Typeform, among others.
He said he believes Spain and Portugal urgently need more professionally managed venture capital funds because many early-stage investors, especially non-professional angels and family offices, tend to “do more harm than good” in the emerging technology scene there, Because they either blew valuations excessively or entered rounds with punitive terms on founders.
“The big news in Spain for me is that we have role models. Also, the tech community in Spain and Portugal is very open, and everyone is happy to support everyone,” he told TechCrunch over a phone call.
Which country does the new fund believe is “most attractive” in terms of startups? “I would say, in general, we have three big entrepreneurial cities in Barcelona, Madrid and Lisbon. If you go back 10 years, Barcelona was the biggest tech city. But Lisbon and Madrid have played catch-up very well. Now, entrepreneurs have The choice of where they want to set up their company.
Linares stressed that Southern Europe is now “full” of entrepreneurs who are role models for new startup founders, stressing: “We have a lot of talent and founders can internationalize very successful startups from here.”
“Barcelona and Madrid are on par with each other as ecosystems, but Valencia is growing,” he added. “There’s a summit in October called the Valencia Digital Summit. We were speakers last year and it was great. I was very surprised. It was my first time there.”
The fund will also look at startups coming from Italy, to complement its “Southern Europe” thesis.
“We will have a large share of our investments in Spain, but at home [Southern Europe]Italy is largely overlooked. Rome and Milan are catching up. “We’re very excited about it,” Linares said.
Plus Partners comes at a time when venture capital firms are focusing their attention on Southern Europe.
Yellow, a new venture capital firm set up by Oscar Pierre and Sacha Michaud (founders of Glovo), as well as Adam Lasry (former investor of venture capital giant Atomico), has recently placed its bets on the region, raising €30 million in funds. In 2018. Less than five months.
Moreover, the Spanish VC Kfund Starch $75 million in technology venture funding earlier this year.
According to a Dealroom report on the Spanish tech ecosystem, the total enterprise value of Spanish startups exceeded €100 billion in 2023. It was also found that investment in Spanish startups stalled last year, with €2.2 billion raised across around 850 funding rounds.
Annual “State of Europe Technology” report For 2023, the ecosystem in Spain found itself in fourth place overall and secured first place higher Number of startup funding last year.
Finally, the European Investment Bank’s venture capital arm also backed a new fund in Spain this year which Aims for investment €1 billion ($1.1 billion) in growth-stage tech startups.