Deal in focus: Kronomav raises €900,000 in equity and debt

"This was the fifth investment from our venture debt fund – the only such vehicle in Spain," explains Carlos Conti, general partner at Inveready. "Quality dealflow comes from close relationships with local VC funds. We collaborate with them in new investments and follow-on deals. We have a very good relationship with Clave Mayor and decided to work on this transaction together. The process began in May," says Conti. 

The financing package is understood to comprise an equal split of equity, three-year venture debt financing and soft loans. Inveready committed venture debt from the Venture Finance vehicle, which launched in 2012 with €15m. Clave Mayor invested via Comval Emprende, launched in 2006 by the Finance Institute of Valencia. Both government entities provided soft loan financing.

"Apart from the more traditional growth financing venture debt, the current situation of the banking sector in Spain means we're seeing a lot of working capital opportunities, where companies should be able to secure bank financing but they cannot," says Conti. "We have to be choosy when it comes to these deals. But we're also seeing traction in standalone deals that don't involve a sponsor and include only venture debt. We want to finance these companies in order for them to get enough critical mass to – if necessary – attract international investors."

Founded in 2006 and based in Valencia, Kronomav is an audiovisual engineering company that manufactures and retails robotic systems. It specialises in robotic guidance systems for television and film cameras, primarily for live events. Earlier this year, the firm was involved in the recording of the London Olympics and is able to film 3D on a real-time basis and provide immediate footage.

Indeed, the hardware company stands out among Inveready's portfolio of primarily soft assets. "We're looking at new areas in the venture debt space. The company is doing really well; it has doubled its revenues this year. And 85% of its sales are done abroad, so it hasn't been so affected by the Spanish crisis," says Conti.

In 2008, Clave Mayor bought a minority stake in the firm in a deal valued at €1m, according to unquote" data. The transaction took three months to complete and began when the company approached the VC to develop its business plan. 

"The company is entering a very interesting new market: security and defence," says Conti. "They do robotics for cameras that can be mounted onto battle vehicles or perimeter control units. Their new products have been very well received and are being used in remote and demanding areas around the world. This is an area they really want to grow in, so they'll invest in new quality certification and more R&D."

Main export markets include China, with plans to expand into Latin America – a traditionally strong market for Spanish companies. "The company had liquidity problems due to the collapse of the traditional banking sector so there was no way to finance working capital. But robotic assets are good quality assets, which made it attractive for the venture debt fund," says Conti.

Kronomav currently employs around 10 members of staff. Growth plans involve the identification of local industry partners in each strategic region; China, Mexico, Russia and eventually Brazil. "They need to identify spearheads in every region; Kronomav can sell directly in Europe already but needs local partners in further markets. That's what they have in China, which is why they're doing so well there," explains Conti.

People
Clave Mayor – Pedro de Álava
Inveready – Carlos Conti

Advisers
Debt – Lexcrea (Legal); BDO (Financial due diligence).

This deal was originally covered on 2 December

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Southern Europe
• Expansion
• Spain
• Inveready First Capital