Government doubles Next Tech Fund investment to boost the growth of digital companies and high-impact projects
30 March 2023
- The joint initiative of the Secretary of State for Digitalisation and Artificial Intelligence and the Official Credit Institute (ICO) expands its public endowment with the aim of mobilising up to €8 billion of public-private capital
- Of the total already invested, €1 billion corresponds to Spain's participation in the "Tech Champions" initiative, a large European fund to support cutting-edge technology start-ups
- The 335 million euros that complete the investments approved by Fond-ICO Next Tech Fund are distributed in six operations that, in collaboration with the private sector, will channel more than 736 million euros of investment for scaleups and innovative projects in Spain
Fond-ICO Next Tech, an initiative of the Ministry of Economic Affairs and Digital Transformation, managed through the Secretary of State for Digitalisation and Artificial Intelligence, and the Official Credit Institute ICO-AXIS, doubles its investment. Fond-ICO Next Tech remains the second largest of its kind in Europe, closer to Germany, which holds first place, as it expects to mobilise up to €8 billion of public-private capital.
The initiative, part of the Recovery, Transformation and Resilience Plan (PRTR), was launched in 2021 to foster the development of innovative, high-impact digital projects and investment in growth companies (known as scaleups) by strengthening public financing instruments, attracting international funds and boosting the venture capital sector.
The fund started its investment activity in February 2022, with the initial objective of mobilising up to EUR 4 billion in public-private partnerships (EUR 2 billion private investors + EUR 2 billion Next-Tech).
With the commitment to continue contributing to the digital transformation of the economy and to generate quality employment in innovative sectors, it has been decided to increase the initial endowment of the fund by an additional €2 billion in public funds. In this way, Fond-ICO Next Tech reaches a size of €4 billion, with the capacity to mobilise up to €8 billion through public-private partnerships.
This expansion will align the ICO Next Tech Fund's strategy with the major legislative developments brought about by the new Startups Law and the Create and Grow Business Climate Improvement Law, which provide financial and fiscal incentives to entrepreneurs and innovative technology-based startups.
Initiatives under the Next Tech Fund
Since the start of the fund's activity, investments amounting to €1.335 billion have been approved to foster the growth of high-impact technology companies (scaleups) and digital projects.
Of this amount, €1 billion will go to the European Tech Champions initiative, which will help provide funding to Europe's leading innovative start-ups, with the aim of creating an entrepreneurial ecosystem to develop projects with global potential. This new European fund already has commitments of 3.75 billion financed by Spain, Germany, France, Italy, Belgium and the EIB Group.
The investments approved by Fond-ICO Next Tech to date are completed with six operations amounting to 335 million euros which, with the participation of the private sector, will channel more than 736 million euros in Spain.
Fond-ICO Next always acts in collaboration with private investors, either through indirect investments in funds (venture capital funds, corporate funds or other investment vehicles) or direct investments in Spanish startups and scaleups.
Its activity contributes, on the one hand, to attracting foreign capital to Spanish projects and, on the other, to consolidating the growth of Spanish companies with high potential so that they become unicorns, retaining talent and thus consolidating the entrepreneurial ecosystem in Spain.
Summary of the six operations
- Leadwind, a venture capital fund managed by KFund with a target size of €250 million and the capacity to make investments of between €5 million and €15 million in growth companies in Spain, Portugal and Latin America, with a focus on enabling technologies. Fond-ICO Next Tech initially invested EUR 70 million in this fund together with Telefónica, BBVA and KFund. It has now increased that investment by a further 30 million to 100 million. The Fund will promote projects that will mostly have a technological base based on software and/or platforms, prioritising the application of artificial intelligence, the use of blockchain technologies and centralised networks, the internet of things, 5G connectivity, augmented and enriched reality, cloud data analytics solutions and processing on the Edge or robotics, among others.
- Andromeda: a fund managed by Seaya Ventures with a target size of €300 million, which will invest in European technology growth companies related to sustainability, energy transition, electrification of the economy, and other areas such as sustainable agriculture and circular economy Fond-ICO Next Tech has invested €100 million, together with Iberdrola, Seaya and Nortia Capital.
- Cathay Innovation Fund III: a €1 billion venture capital fund managed by Cathay Innovation, dedicated to investing in projects related to the sustainable transformation of industry and society. Fond-ICO Next Tech has invested EUR 100 million in this fund, in which France's BpI and the EIF also participate. Cathay will invest in key technologies in all areas of the digital economy, transforming sectors such as digital healthcare, financial technology, consumer, new smart mobility, logistics and energy over the next ten years.
- Cabify: Fond-ICO Next Tech has participated with EUR 20 million alongside the European Investment Bank (EIB), Mutua Madrileña, and Orilla Asset Management, among others, in a financing round for the Spanish multi-mobility company. This financing will enable the company to accelerate its strategic plan for sustainable mobility through the electrification of its fleet in Spain and Latin America and to strengthen its technological innovation strategy.
- P103" Fund: a fund aimed at professional investors with a target size of EUR 200 million, in which Fond-ICO Next Tech has invested EUR 10 million. The Fund will invest primarily in technology companies with an ESG (environmental, social and governance) approach.
- Trucksters: Fond-ICO Next Tech has invested 5 million euros in this Spanish technology-based company that uses artificial intelligence to provide a relay system to the road freight transport industry that makes journeys more efficient, sustainable and with better conditions for drivers.