Iberian Startup Scene | February 2022

I am a VC at Armilar, covering Enterprise Software/B2B SaaS and Blockchain.

In my free time, I write startup-related topics, including this newsletter. Content, opinions, and typos are my own!

Feedback is welcome.

HIGHLIGHTS

resources

Investments

What’s happening
- 2021 was a record year
  - Significant increase in investment amounts (>2x) and expansion of valuation multiples in Europe (2021 report by Pitchbook; Enterprise & Deep Tech VC in Europe & Israel 2021 by Angular Ventures), and even more in Iberia
  - The increase in the supply of cash came mostly from VCs funds “deploying and raising faster than ever” and non-traditional investors increasing participation in early-stage financing
- 2022 started with a very different macroeconomic outlook vs. 2021
  - Higher inflation and, consequently, a higher probability that central banks increase interest rates in the short-term (increasing the opportunity cost to invest in riskier asset classes)
  - Growing concerns and uncertainty associated with the war in Ukraine
- Globally, public tech companies and private startups are starting to be negatively impacted
- Though the investment amount and number of rounds announced in the first months of 2022 are aligned with 2021 values, Iberia is no different and I am starting to witness somme contraction
  - Rounds are taking longer to close (aka investors are taking longer to decide)
  - Entrepreneurs (in the middle of the fundraising) are reviewing downwards the round size
  - …
- Despite this initial outlook, I still see most investors open for business and a few startups being able to raise funds in “2021” terms
- Going forward, it is still early to say where the market will land and whether we are reverting to the mean or something else. Independently of the future scenarios, cash is king! So quickly adjusting the burn rate, plans and fundraising timings and expectations to this new environment is critical. (Have you already adjusted to this new reality?)
New funds