Madrid-based VC agency Ok Fund is in the present day saying the primary shut of its new funding car, Leadwind, which can spend money on early growth-stage startups in southern Europe and Latin America.
The brand new fund is concentrating on €250m — which might make it the most important development fund in southern Europe. It has €175m dedicated from backers together with Telefonica, BBVA, Go-Hub and SATEC. In addition to serving to European corporations broaden to Latin America, it’s going to additionally assist Latin American startups that want to develop into Europe.
Leadwind will write cheques beginning at €5m, investing in corporations with a €40m valuation or increased. And aside from the scale of investments (Ok Fund’s earlier two funding automobiles made investments between €100k-€2m), the brand new fund marks a change in focus for the agency, reflecting a wider pattern in southern Europe’s startup sector.
“I wouldn’t spend money on corporations constructing a blockchain, however in corporations that may use the blockchain as a service”
Whereas Ok Fund’s first two funds have been generalist, Leadwind will particularly look to again B2B startups with a deeptech element.
“The thesis is completely different,” Leadwind associate Miguel Arias tells Sifted. “K1 and K2 [K Fund’s first two funds] have been very generic of their strategy round applied sciences and enterprise fashions. Right here we’re wanting extra at web of issues, AI, knowledge and blockchain, as platforms.”
The shallows of deeptech
By “as platforms”, Arias tells Sifted that he means startups that can enable different companies to construct applied sciences like AI and blockchain into their workflow: “I wouldn’t spend money on corporations constructing a blockchain, however in corporations that may use the blockchain as a service, that may be utilized to plenty of completely different enterprise fashions.”
Arias offers the hypothetical instance of an organization that has constructed a digital identification answer utilizing blockchain expertise, which might be helpful to a variety of different companies who may not have the deeptech expertise to construct one themselves.
“What we’ve seen is that there’s a lot of expertise on this space — on the form of floor of deeptech. There’s a rising maturity, each by way of tech expertise and enterprise expertise, round these sorts of corporations in southern Europe, and more and more in Latin America,” he says.
Arias factors to knowledge analytics corporations like TinyBird (which just lately raised Spain’s largest ever Sequence A spherical) and Seqera Labs, as examples of this shift. Different current deeptech success tales from Spain embrace quantum computing startup Multiverse Computing and neural interface developer Inbrain.
It is going to be music to the ears of many individuals following southern Europe’s tech sector, which remains to be shaking off a popularity as one thing of a no-go zone for constructing deeptech corporations.
It’s a popularity that Arias says had some fact to it, till now. “We all the time had the expertise at universities, however tech switch was not taking place. There was an actual blockage there. However now there are extra scientists and engineers who see that they will entry early-stage funding, which is a brand new factor that occurred 5 years in the past,” he says.
Folks energy
Leadwind’s staff additionally consists of Sergio Álvarez, cofounder of spatial knowledge firm Carto, and Borja Santos, former nation supervisor for Spain and Portugal at funds firm Stripe.
Arias says that Santos’s expertise of main worldwide expansions in Europe will likely be notably useful, because the fund plans to again Latin American companies that want to develop within the continent.
“It’s a brand new factor, now corporations in LatAm are mature and have sufficient monetary muscle and class to have the ability to transfer into Europe, and we wish to assist there,” he says.
“The area is prepared and it’s booming. And in case you are not right here, you’re in all probability already late to the occasion”
Leadwind may have a devoted funding staff working from São Paulo, and Arias says the fund may even be making use of Telefonica and BBVA’s networks in these nations to assist supply dealflow.
Working with large company LPs like these additionally helps inform Leadwind’s wider funding thesis, as Arias believes they may present a path to marketplace for the fund’s B2B corporations: “We’re investing in enabling applied sciences, which makes the angle of getting corporates partnering with us and changing into channels for our corporations much more interesting.”
Arias believes that each one of this will likely be useful in locations which might be more and more changing into extra aggressive for buyers, as funding volumes develop and the world pays extra consideration to lesser-known tech hubs.
“The area is prepared and it’s booming. And in case you are not right here, you’re in all probability already late to the occasion,” he says.
Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith