The Spanish government launches Next Tech Fund, which will mobilize up to 4,000 million euros to promote high-impact digital projects - a new fund to promote digitalization and technological projects in Spain. The Government launches the Next Tech Fund to encourage the growth of digital companies and investment in high-impact technology projects.

This initiative —launched by the Ministry of Economic Affairs and Digital Transformation (from the Secretary of State of Digitization and Artificial Intelligence) and the Institute of Official Credit— seeks to foster public-private collaboration and the development of risk capital, with the goal of mobilizing resources sets of up to 4,000 million euros (with a State share of up to 49%) in an initial period of 4 years.

"Expandable, of course," added Nadia Calviño, first vice president of the Government.

This will reach "levels of investment capability, very high", with which Spain is positioned well with the second european fund with greater allocation, only behind Germany (7,000 million), doubling the capacity of France and multiplying by 1.5 in Italy, according to Carme Artigas, Secretary of State of Digitization and Artificial Intelligence.

Spanish government launches Next Tech Fund

The implementation of the fund will promote digital entrepreneurship and enabling digital technologies, as well as consolidate the growth of highly innovative technology-based companies, with the intention of promoting competitiveness, innovation, the investment of international funds and the attraction and retention of national and foreign talent.

"There is a huge talent and entrepreneurship opportunity anywhere in Spain," said Nadia Calviño, Minister of Economy, during the presentation of the fund on Monday 19. "Even in these harsh circumstances Spanish entrepreneurs have managed to get ahead," he praised.

"We have to pamper that talent, and in particular that of women," he recalled.

Thus, the Next Tech Fund is " a fundamental project to continue advancing in the digital transformation of the country "and to provide" greater shares of competitiveness and employability " to these companies. The final objective: to position Spain as a "hub of digital entrepreneurship at a global level", so that "there is not a single good business idea in Spain without financing", Carme Artigas pointed out.

Spanish government launches Next Tech Fund

"We want to create unicorns in Spain", concluded Artigas, on these private capital companies that have exceeded 1,000 million valuation.

This is constituted as a fund of venture capital funds, although it may make direct investments in companies, which will channel investments to companies that develop their activity in Spain.

In addition, it will focus on those funds and companies that develop their activity in the digital world, and in projects related to artificial intelligence, the Internet of Things, technologies, massive data processing, cloud computing, blockchain, natural language processing, cybersecurity, biometrics and digital identity and algorithms of green, among others, which will be chosen by a Selection Committee of Investments.

"The economic recovery will undoubtedly be a digital recovery," said Artigas.

The objective of the investments will be mainly to position the entities in the scale-up stage (growth), with a minimum investment ticket of 3 million euros. A scale - up is a growing technology or digital company with high impact, which already has its niche and seeks to gain scale. They are companies that have already exceeded one million euros in revenue or that have obtained that figure in financing, or that have grown by 20% annually, at least, for 3 years.

Spanish government launches Next Tech Fund

However, the fund may also invest in startups with investment tickets of around one million euros, only through funds and vehicles, "as long as these entities develop technological development projects in Deep Tech technologies", or innovative high impact, clarifies the Ministry of Economic Affairs.

"The implementation of this fund will allow to respond to financing needs that are currently not covered by existing mechanisms, both in relation to the different phases of business growth and by technological area", assures the organization.

"We need funds of funds "and" this is a great example "to boost scale-ups, since" Europe has not been able to compete with Silicon Valley and the 'Silicon Valley' of Asia", said André de Aragão, Secretary of State for Digital Transition in Portugal, in his participation during the event.

Tools such as this Next Tech Fund are " fundamental "to achieve the objectives of digitalization and employment and for" Spain to take the European leadership", has joined Ignacio Gallego, president of Nokia Spain, which supports the initiative.

It will be a "fundamental instrument in promoting the technology industry in Spain and a world reference," said Alberto Granados, president of Microsoft Spain.

According to data from the 2020 Entrepreneurship Map, Spain is more prone than the rest of Europe to financing through resources of family and friends, with financing with own funds as the main tool (46%), while only 5% uses public resources.

Spanish government launches Next Tech Fund

In addition, the majority (60%) of venture capital serves to support seed companies in Spain, almost double that of companies in "intermediate" status (32%) and with only 8% for emerging companies in expansion. "This is precisely the gap we want to reduce by launching this new mechanism," explains Carme Artigas.

These, however, already represent 15% in Spain, where the entrepreneurial ecosystem has startups that already have 2.5 years of life.

This fund, on the contrary, could contribute to the Spanish ecosystem in 10 years to have more large companies with "more ambition", and financed mostly by capital funds, says Aquilano Peña, founder of Kibo Ventures.

"Spain is going to be a school of entrepreneurship "in 10 years, says Laura González-Estéfani, founder and CEO of The Venture City, for whom"we are already a school of talent".

The government expects to take out 2 new bills before the end of the month (Law Creates and Grows, and the Reform of the bankruptcy framework) and has recently approved, in addition, the new Law of Startups. The bill is currently in public hearing.

While recognizing the value of this framework, the sector is calling for a "more transformative" law: the experts consulted detect a lack of ambition with a very narrow definition of startup, question the 5-year limit to meet this condition and consider insufficient progress in stock options.

# Spanish government launches Next Tech Fund #