(Bloomberg) -- The European Investment Bank’s venture capital arm has committed €350 million ($379 million) into what’s set to become Spain’s biggest venture capital fund — part of a European drive to help local companies overcome an investment slump and to stop them from relocating overseas.
The fund, Kembara, aims to invest €1 billion in climate and deep-tech startups in Europe, targeting “scale-ups” that have already attracted initial funding rounds and are looking for money to expand, the EIB said in a statement on Monday. The European Investment Fund will act as an anchor investor, which the fund managers are betting will help bring additional outside capital.
The investment is part of the 2023 European Technology Champions Initiative, a push to provide funds to growing startups in key industries such as artificial intelligence and cybersecurity. Spain has traditionally lagged many of the other large European countries for startup funding. It ranked seventh in 2023 at €2.2 billion in VC funding, behind the UK, France and Germany among others, according to data from Dealroom.
The ETCI has so far invested in eight European technology funds, as well as €240 million directly into Spanish companies, including HR software maker Factorial.
The initiative follows a slump in private venture capital after the Covid-19 pandemic. Funds pulled back on investments when growth in some digital services slowed after lockdowns ended. Investors put about €16.3 billion into European startups during the first quarter, an improvement on 2023 but down more than 50% from the first quarter of 2022, according to data from Pitchbook.
--With assistance from Clara Hernanz Lizarraga.
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