COFIDES holds a share in K Fund II, a venture capital fund created by Kanoar Ventures that focuses on innovative startups and the development of new technologies. FIEX, Spain’s fund for investments abroad, sourced COFIDES’s M€5 share in K Fund. Companies focusing on research, innovation and the development of new technologies will be the investment targets.
K Fund Investment Manager, Pablo Ventura, explains that K Fund II will engage in seed or A series finance (investment in early stage software companies). The companies at issue are usually in the product development stage or beginning to scale up their sales. K Fund strategy includes business to end consumer (B2C) and business-to-business (B2B) companies.
"As K Fund II also aspires to create large internet companies it invests only in firms with international ambitions from the outset"
Pablo Ventura, K Fund Investment Manager
K Fund II is associated directly with digital conversion, for all the firms in which it will invest will contribute to that goal, with ‘tools that provide for remote working’ and ‘healthcare digitalisation, including the digitalisation of historically analogue sectors’. The fund aims to invest in projects with well-trained, multidisciplinary, ambitious staff eager to learn and adapt. ‘They should be geared to large markets where there are business opportunities in connection with internet-enabled digitalisation and scalability’.
Companies that have benefitted from fund support are characterised by an international or even global business vision. Ventura notes in that regard that ‘Spain is a large enough market to conduct business profitably, but as K Fund II also aspires to create large internet companies it invests only in firms with international ambitions from the outset’.
The teams involved in the projects selected by the fund have prior experience. Nonetheless ‘we also invest exceptionally in teams with less experience but high potential’, adds Pablo Ventura.
Internationalisation is very clearly of key importance for this fund. ‘Software companies generally rest on the premise that their product can be scaled up and consequently base their strategy on highly competitive pricing, generating very low commercial margins. Building large, healthy businesses therefore calls for huge customer volumes, for which internationalisation is a must’ he notes.