Fond-ICO Next Tech invests €100 million in Cathay Innovation Fund III, a venture capital fund targeting the sustainable transformation of industry and society
15 July 2022
- This is the third investment by Fond-ICO Next Tech, a joint initiative of AXIS, the venture capital company of the ICO and the Ministry of Economic Affairs and Digital Transformation, acting through the State Secretariat for Digitalisation and Artificial Intelligence.
- With the three investments it has made to date, Fond-ICO Next Tech will mobilise investments of at least €540 million in public-private partnerships in Spain in digital businesses and projects
- The €1 billion Cathay Innovation Fund III is one of the largest European venture capital funds investing in projects linked to the sustainable transformation of industry and society in the coming ten years
The Instituto de Crédito Oficial (ICO) has granted approval through AXIS, the ICO’s venture capital company, for a €100 investment by Fond-ICO Next Tech in Cathay Innovation Fund III, a €1 billion venture capital fund, managed by Cathay Innovation, investing in projects linked to the sustainable transformation of industry and society.
This is Fond-ICO Next Tech’s third operation since it was launched in 2021, reaching a public investment of €270 million. It has previously invested €70 million in Leadwind alongside Telefónica, BBVA, KFund, and €100 million in the Andromeda Fund with Iberdrola, Seaya, and Nortia Capital. With these three investments, Fond-ICO Next Tech will mobilise investments of at least €540 million in public-private partnerships in Spain in digital businesses and projects.
Cathay Innovation Fund III is one of the largest European venture capital funds investing in scale-ups with high potential for growth, value creation, and capacity to expand internationally. The fund will invest in key technologies in all areas of the digital economy for the next 10-year transformation of sectors such as digital health, fintech, consumer, new smart mobility, logistics, and energy.
The manager, Cathay Innovation, has previously invested in Spain in earlier funds, in companies such as Glovo and Wallbox, and is currently studying a highly significant pipeline of Spanish companies.
Cathay Innovation Fund III is backed by institutional investors and multinational companies such as Sanofi, Total Energies, Valeo, BNP Paribas and its subsidiary Cardiff, Groupe SEB, Groupe ADP (Paris Aéroport).
The new Fund will mainly invest in companies with sales of €5 to €30 million. This investment seeks to empower businesses to lead the large markets of the future in the next ten years with the backing of next-generation technology, new business models, and platforms that will form the core of the digital and sustainable transformation of the future.
Fond-ICO Next Tech
Fond-ICO Next Tech is an initiative of the Ministry of Economic Affairs and Digital Transformation, operated by the State Secretariat for Digitalisation and Artificial Intelligence and the ICO. It aims to promote the development of high-impact innovative digital projects and invest in growth companies, within the framework of the recently updated Spain Digital 2026 strategy and in the activities of the Spanish Government’s Recovery, Transformation and Resilience Plan.
The objective of Fond-ICO Next Tech is to invest both in funds (venture capital funds, corporate funds, and other investment vehicles) and in Spanish growth companies in the technology sector. The aim is to mobilise joint public-private partnership resources of €4 billion (half from public funds and half from private investment) over an initial four-year period.
Fond-ICO Next Tech investments will help boost digital entrepreneurship in digital enabling technologies, as well as consolidate the growth of highly innovative technology-based companies. This fund is one of the ICO's key instruments for boosting the digital transformation of the Spanish productive sector, one of its strategic priorities for the coming years.
Fond-ICO Next Tech Investments in 2022: Leadwind Fund and Andromeda Fund
Since its launch in 2021, Fond-ICO Next Tech has invested in two other funds:
• Leadwind, a venture capital fund managed by KFund with a target size of €250 million and the capacity to make investments of between €5 and €15 million in growth companies in Spain, Portugal, and Latin America, with a focus on enabling technologies. The Fund will invest mainly in projects that have a technological basis predominantly based on software and/or platforms, with emphasis on 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 Edge processing, and robotics, among others.
• Andromeda, a fund managed by Seaya Ventures, which has a target size of €300 million, will invest in European technology scale-ups related to sustainability, energy transition, electrification of the economy, and other areas such as sustainable agriculture and the circular economy.
These investments from Fond-ICO Next Tech fall within the scope of ICO’s strategic aim of boosting public-private partnerships in high-impact innovative digital technology projects and developing scale-ups that create quality employment, in line with the Spanish Government’s Recovery, Transformation and Resilience Plan.
Axis acts in a public-private partnership with the venture capital industry in all fields of activity and at all stages of business. It currently has commitments to manage up to €7.15 billion in its four funds: Fond-ICO Next Tech, Fond-ICO Pyme, Fond-Ico Infraestructuras ESG and Fond-ICO Global, which would allow for a combined mobilisation of over €15 billion in public and private resources over the next five years, depending on the private sector's capacity to absorb resources and deliver projects.
About Cathay Innovation
Cathay Innovation is a global venture capital partnership, created in affiliation with Cathay Capital. It has made over 120 investments in Europe, North America, Asia, Latin America, and Africa which have raised over $16 billion and created 15,000 jobs since starting in 2015. The company has backed 19 unicorns, such as Chime, Glovo, Ledger, Owkin, Momenta, Sidecar Health, and ZenBusiness, with initial public offerings including Pinduoduo (Nasdaq: PDD) and Wallbox (NYSE: WBX) and the acquisitions of Glovo by Delivery Hero, Drivy by Getaround, Alkemics by Salsify, and Trifacta by Alteryx.