JME Ventures is an early-stage venture capital fund manager (entry into pre-seed, seed and series A phases and capacity to accompany up to late-stage growth phases), which invests without leverage in the share capital of recently created technology-based companies (with a life span of less than 5 years) with high growth potential, mainly in Spain. JME Venture Capital was created in 2016 as an evolution of the investment activity that had been carried out by the José Manuel Entrecanales Foundation since 2009, when it was set up. All of this was carried out by two key executives, Javier Alarcó and Samuel Gil.
Javier is a Founding Partner and CEO of JME Ventures and has dedicated his professional life to the financial sector in general, and specifically investment banking. He started his career at Beta Capital and then joined Banco de Negocios Argentaria. Meanwhile, Samuel is a Partner and Investment Director. Before joining JME, he was the Investment Director of the José Manuel Entrecanales Foundation (FJME) and Investment Manager at Faraday Venture Partners. Previously, he worked as an Energy Trading Manager at Iberdrola and as a consultant at Accenture.
Both decided to set up an agency where information technologies (80%), industrial technologies (10%) and clean technologies (10%) prevail. The products of the invested companies are aimed at final consumers (B2C) and to other companies (B2B). Specifically, some of the sectors and business models they are interested in are: fintech, insurtech, marketplaces, SaaS and digital brands.
BUSINESS MODEL
As for their approach to the JME Ventures business, the founders are clear, “we select companies that are looking for between 200,000 and 3 million Euro. At the time of entry, it is estimated that the pre-money valuations will be between 3 and 15 million Euro,” they specify. Likewise, with this investment the founders intend to “obtain a minority but relevant participation in the share capital of between 12% and 15% of the latter, which will allow representation on the board of directors, so as to collaborate in the definition of the company’s strategy,” they explain.
INVESTMENT CRITERIA
With a vocation for international expansion, JME Ventureshas a team of highly involved professionals and a very talented team. “The investment criteria is being highly scalable”, they add. In addition, they are focused on offering a potential return of at least “10 times the capital invested over a 7-year period“. The business models are tested through first sales or very relevant usage metrics and are focused on solid unit economies, with special emphasis on margins, purchase recurrence and customer acquisition costs.
These models, as explained by the founders of JME, are “capable of creating defensible competitive advantages and barriers to entry that allow margins to be defended against competitors or new entrants”. One of the enclaves that differentiates them from other investment vehicles is the wide range they have: between 200K and 3-4M. This allows them to accompany companies during several growth stages. “We allocate more than half of our funds to follow-on, that is, to continue to financially support the companies in which we invest,” they say.
Along with this, JME Ventures allocates its investment to countries including Spain, with 90%, and other countries when the founders or teams are strongly linked to Spain (10%). The founders also specify that JME Venture Capital has more than 100 million Euro under management distributed in 3 funds (2012:20M Euro; 2016:40M Euro; 2020:60M).
Its main investments are: Flywire, Jobandtalent, Worldsensing, Playspace, Onyx Solar, Séntisis, Caravelo, Ironhack, Waynabox, Muroexe, Odilo, Smart Protection, Lingokids, 21Buttons, PLD Space, Biome Makers, BCN3D, VOI, eToshi.
As for the follow on, these are marked according to the evolution of the company and the objectives set by the company at the time of entry must be met. JME Ventures has the capacity to invest up to 4 million Euro in rounds after our entry.
JME’s roadmap for this year focuses on the launch of a new fund with which to make the most of, on the one hand, the great attraction of technology-based businesses, capable of completely altering the rules of the game in the main sectors of the economy, and on the other, the strong attraction of Spain for newly created technology companies, reflected in the noteworthy exits.