Bewater Funds nears EUR 7m close for second fund, aims to back 20 companies in next four years

Bewater Funds, which is part of Indexa Capital Group, is planning to hold a first close for Bewater II FCRE of EUR 7m, Blanco said. This fund has a hard-cap of EUR 40m and the VC plans to have it closed within two years, he added.

The firm is interested in receiving approaches from investors for the new fund, Blanco said. The VC has looked for investors for the first closing in-house, but would probably hire advisors to help reach its hard-cap, he added. It has worked with Cuatrecasas as its legal advisor, he added.

The minimum commitment in the fund for investors is EUR 100,000, Blanco said. Current investors in the fund include Spanish professional investors, business angels and some family offices, Blanco said.

The firm would be interested in bringing on board an investor such as an insurance company or big family office providing a ticket of EUR 3.5m-EUR 4m, the executive said.

Bewater Funds invests in technology companies in Spain and Portugal, Blanco said. These companies must have positive or almost positive cashflow, from zero to EUR 3m, he added. “It is a niche market with less competition to invest in,” he added. In general, Bewater Funds invests in companies with a valuation below EUR 15m-EUR 20m, he added.

The VC’s strategy is to give liquidity to existing investors in companies, buying their stakes, Blanco said. “We mainly facilitate cash-out to other investors and we are not focused on fundraisings,” he added.

Bewater II FCRE takes minority stakes (5%-25%) with tickets of EUR 500,000-EUR 2m, Blanco said. It has already made three investments, all of which have seen it acquire stakes from existing investors: Lico Cosmetics, a Spanish cosmetics company; Nailted, a software company for human resources sector; and Indemniza.me, a company focused on compensation claims, he said.

The VC also offers its investors the possibility of investing in its deals with ad-hoc fund, created just to invest in one deal, Blanco said. “We invest and at the same time create a fund just for that investment,” he added. Investors can sell their stakes in these mono-funds to fellow investors via the firm’s website, he added.

Bewater Funds started investing with the creation of Renta 4 Bewater I FCR, which has been already fully invested, Blanco said.

The fund was created at the end of 2019 and raised EUR 4.5m, Blanco said. The fund has a ten-year duration and is expected to divest its portfolio over the next six years, he added.

Bewater’s first fund holds minority stakes in drive-in cinema business Autocines, co-working space provider Cink Coworking, elderly home care business Cuidum, cloud data managing company Datos 101, dental product ecommerce platform Dentaltix, SaaS data processing platform DocDigitizer, retail physical space analytics provider Flame Analytics, mobile network intelligence and automation specialist Kenmei, real-time manufacturing management system provider MESbook, growth consultancy Product Hackers, spreadsheet workflow automation platform Sheetgo, wool and knitting kits retailer We Are Knitters, and online food delivery company Wetaca, Blanco said.

When it comes to exits, the fund’s first option is to seek a sale of its portfolio companies, Blanco said; but if the founder is not interested in selling, it would look to sell its stake.

Renta 4 Bewater I FCR has made two divestments: Gana Energia, which was sold to Repsol, generating a net internal rate of return (IRR) of 157%; and Gear Translations, which has yet to close, Blanco said.

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