K Fund launches €70m second vehicle

Alessia Argentieri
08 June 2020

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Spanish venture capital firm K Fund has launched a second vehicle dedicated to early-stage Spanish statups.

The fund is larger than its predecessor, which closed on €50m in October 2016. Despite a slightly larger size, it will invest in the same segment, primarily focusing on seed rounds.

The fund expects to hold a final close by the end of the year and to make its first investments by July.

"Despite the coronavirus emergency, our fundraising has been very smooth," Jaime Novoa, partner at K Fund, told Unquote. "A couple of investors pulled out, but overall we have seen a lot of interest in our new vehicle and investment strategy, from a wide pool of Spanish and international LPs."

Investors
The fund intends to build an LP base composed of several institutional investors, as well as private investors.

"Most of the investors from our debut fund have already re-upped to this second vehicle," said Novoa. "We expect our LP base will comprise around 90% Spanish investors – institutional LPs, high-net-worth individuls and entrepreneurs – and a minority of European institutional investors."

Investments
The fund aims to invest in 25-30 early-stage businesses primarily based in Spain. It will also dedicate a minority of its capital to investments in Portugal and the rest of Europe, and to opportunistic deals in the US.

It targets companies operating in the internet and mobile technology sectors, with particular focus on software-as-a-service operators, as well as marketplaces, fintech, marketing, logistics, big data and security. The fund invests in seed rounds with equity tickets of €100,000-2m.

"We don't have a minimum level of income or traction to look at a company," Novoa said. "What we like is to see a product that makes sense and is being used more and more by customers."

The fund targets innovative companies, with a focus on both B2B and B2C businesses. "We look for companies able to create products and services that are easy to use, intuitive, and that can emphasise design," Novoa said. "Our funds invest in scalable business models that can improve the day-to-day lives of people and businesses."

Since its inception in 2016, K Fund has invested in 28 startups, including Coverfy, Billin, Factorial and Frontify.

People
K Fund – Iñaki Arrola (founding partner); Jaime Novoa (partner).