We’re quite happy to announce that we have a new €70 million fund to continue to invest in the best and brightest Spanish entrepreneurs and early-stage startups, has appointed K Fund team.
To say that the fact that the whole team was able to pull this off in the current environment makes us even more excited, would be an understatement. We started the fundraising process several months ago, but it wasn’t until the beginning of the year that things started to move faster and we got commitments from EIF, ICO and other public LPs that helped us reach this point. The remaining of the LP base is formed by Spanish high net worth individuals, institutional investors, former Spanish tech entrepreneurs and public LPs from various Spanish regions.
With fund II we’ll continue to follow the investment approach we had with K Fund I. We’ll invest from €200,000 to €2 million in first checks in between 25 to 30 companies, leaving enough capital for follow-on funding purposes. We’re business model and sector agnostic, and we currently have a healthy mix of B2B and B2C companies across a wide variety of sectors, including travel, fintech/insurtech and others.
We’re quite happy with the portfolio we’ve been able to put together with K Fund I, which includes companies such as Exoticca (in 2019, more than 35,000 people from 6 different countries traveled to 50 destinations using Exoticca), Factorial (which has more than 60,000 clients in 40 different countries and just raised a large $16 million Series A round from CRV), Bdeo, Hubtype and 24 more. Since the beginning of K Fund I we’ve also added several people to our team with an effort to help portfolio companies in areas such as product, data science or technology, besides the usual functions of helping with future rounds and access to potential customers. We clearly think seed funds can have a bigger impact by adopting a more operational role, becoming a talent hub that companies can leverage during the different phases of company building and the skills needed at each point in time.
We continue to be super bullish on the Spanish startup ecosystem and Southern Europe in general, with markets such as Portugal or Italy that we believe are punching above their weight. We’ve already invested in four Spanish startups with the new fund. All of them are going after huge markets, and have experienced professionals in their funding team The first one, for example, is Bloobirds, which has clients in more than 10 countries and has seen monthly growth of 20% in MRR. The others will be announced in the coming weeks. Also, all investments to date include the participation of various top-tier European VCs, which is another symptom of the growing maturity of the Spanish ecosystem.
The Spanish tech landscape has changed significantly and for the better in the past five years, as more Spaniards choose entrepreneurship as a career path, second generation founders decide to build new companies after succeeding (or failing) with their first one, and international VCs spend more time and money in the country, leading Series A, B and C rounds, which were less often not that long ago. Last but not least, we still view Spain as a talent magnet from people from all around the world, who decide to move to the country for lifestyle reasons and continue to find lower costs of living and lower labour costs than in other European countries.
K Fund launches K Founders, an investment program focused on companies less than 6 months old
With K Fund II we’re also unveiling a new initiative that we’re calling K Founders, an investment program focused on companies that are less than 6 months old and that are run by excellent founders.
In the next few years we’ll invest up to €100,000 in 10 to 20 startups that have been recently founded and are looking for a partner willing to work with them. We won’t take board seats in these companies and we won’t have preferential rights, we’ll use convertible notes to speed up the process and we have a commitment of taking no more than three weeks from first meeting to money in the bank. Since we also believe in building bridges with other co-investors (funds and business angels), we’ll be super happy to share deals with co-investors to reach the capital needed by the companies.
The goal is to back great entrepreneurs at an even earlier stage, perhaps when the only thing they have is an idea and no revenue or usage metrics, in order to give them the financial capacity and freedom to work full time on their projects. If needed, we’ll also take a more active role in helping these companies build the first versions of their product and look for product/market fit.
Based on the progress of the participating companies, we’ll decide whether to re-invest from our seed fund, in quantities that range from €200,000 to €2 million. We’ll run K Founders in batches, and we’ll start accepting applications from July 1st to September 15th 2020. Companies interested in applying for this new type of investment can do so using the following link.