Promotion of investments by venture capital funds in Spain

The Spanish government is trying to overcome the crisis of recent years by introducing various measures. State investments are an important tool in this venture. Through them, an attractive investment climate is to be created and thus private investment is to be encouraged. To this end, the President of the Spanish Government, Mariano Rajoy has presented a plan for economic growth and support of entrepreneurs (Plan de Estímulo Económico y Apoyo al Emprendedor), which provides for various measures, among them a new law for the promotion of investments by venture capital funds in Spain.


As part of this project, FOND-ICO Global was founded on May 24th 2013, being the first public fund of funds in Spain. It is managed by AXIS, the society for risk capital of the Instituto de Crédito Oficial (ICO, a state funding agency controlled by the Ministry of Finance, which is the counterpart to the German KfW). This fund has a capital volume of 1,200 million Euros, which shall only be deployed to stimulate investments by venture capital funds.

With the first public call for tenders published in October, the project has entered its initial stage. The aim is to improve the image of Spain abroad and to encourage foreign investments in Spanish companies. According to the head of the ICO, Mr. Román Escolano, such an interest from foreign companies and in general a high interest in investing in Spain is currently detectable. Thus, through this project existing sources of investment shall be improved and new ones shall be developed, creating jobs, increasing the attractiveness of Spain for international investors and boosting the internationalization of Spanish companies.

AXIS has created for this purpose an investment program, which provides for the granting of funds in regular time intervals. Any fund that meets the respective tender requirements can participate in these regular public tenders. This program allows for the financial contribution of the fund of funds to serve as an investment anchor, thus attracting both national and international investors. Several tenders over the next four years are planned that are to be continuously adapted to the needs of investors as well as to the respective market situation. According to a press release from the ICO it is estimated that the FOND-ICO Global will be involved in the creation of more than 40 new venture capital funds and can mobilize a capital of up to 3000 million Euros.

Firs Experiences

During the first call, whose application deadline expired on October 31 2013, 600 million Euros will be awarded to six funds that are registered in Spain and use part of their fund capital to invest in Spain, regardless of whether the capital is used in the creation or the development of enterprises. The ICO will not carry the bulk of the investment but will provide a maximum of 30-40% of the capital, depending on whether the capital goes to a fund that finances the expansion or development of a company or one that finances startups which is associated with higher risks. In addition, the volume of capital granted depends on the size of the fund. This considerable sum is already higher than the totality of investments in Spain from January to June this year in the venture capital sector.

Call for Tenders

The first public call for tenders applies to two areas: growth and venture capital. In each of these two areas, up to three funds are selected and financially supported. The call for tenders includes the following provisions:

  • The group of participants is set and includes both growth capital funds and venture capital funds. The former includes such funds that invest between 2 and 100 million Euros in shares of companies that already have existed for three years, but are not listed. The latter includes those who invest between 250,000 and 10 million Euros in shares of companies that have existed for five years but are not listed.
  • In both areas operators that conduct purely private funds (without any direct or indirect public involvement) and are interested in investing in Spanish companies will be funded. A prerequisite is that at least 50% of the Fund’s capital or at least double of the amount provided by the FOND-ICO Global is invested in Spanish companies. In addition, the fund must have a minimum of three investors in addition to Fond-ICO Global at the first closing of business and must present the binding commitment by other investors in the amount of at least 20% of the target capital before the decision of the selection committee of the Fond-ICO Global. In this fund Fond-ICO Pyme and/or Neotec (two other state funding agencies) may already have invested as long as the fund meets the laid down conditions and the maximum amount is not exceeded.
  • In the area of growth capital FOND-ICO Global can invest in each selected fund up to 30% of its target capital with a maximum amount of 70 million Euros and a maximum of 15 times the promised investment capital of the Fund. In the area of venture capital FOND-ICO Global can invest in each selected fund up to 40% of its target capital with a maximum amount of 20 million Euros and a maximum of 20 times the promised investment capital of the Fund.

Selection Process

The selection process is identical for both areas and is as follows: first a qualification phase is planned within which the companies must demonstrate that they meet the requirements listed above. All the necessary documents need to be submitted in person to AXIS PARTICIPACIONES EMPRESARIALES SGECR, S.A.U. at the Registro General de Axis (C/ Los Madrazos 38, 28014, Madrid). It ensures an evaluation of the submitted tenders of the companies that have qualified in the first phase, in which the three funds that have the best assessments are selected.


The creation of this program with a total investment volume of 1,200 million Euros certainly represents a further step for Spain out of the crisis and is also a special opportunity for interested investors. This and the following calls for tenders will each be published on their website.

For additional information on venture capital funds in Spain,

Please note that this article is not intended to provide legal advice.

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