Tech exits in Spain in the 2017 and 2018 period: more and bigger but huge outliers are still hard to find
Last time we wrote about Spanish technology exits was more than two years ago. Quite a few things have changed since then, both on the investment and M&A markets, so we thought we’d revisit what we published back then with some additional data and charts.
We’ve written extensively about the increase in local and international VC firms active in Spain, and also about the significant uplift in total investment volume and deals in Spain. But, what’s going on in terms of exits?
More than 50 exits combined in 2017 and 2018
At some point, for the ecosystem to be healthy(ier), exits have to happen for entrepreneurs to be rewarded and for VCs to be able to return money back to their LPs.
Traditionally, and according to the data we’ve been collecting since 2013, an average of between six to seven tech companies have exited per year in the 2006 to 2015 period.
It’s important to note here that this analysis is based on exits that have been publicly announced, which means that we’ve probably not included a few old exits, since the sector did not receive as much press coverage as it does today.
What we’ve seen in the past couple of years is a very significant increase in exits, with 53 recorded in both 2017 and 2018 . These exits combined for €850 million, taking into account AlienVault’s exit to AT&T, Wallapop’s US division and Stat-DX.
More (and bigger) exits
As visible on the graph above (click to enlarge), the vast majority of exits that have taken place in Spain in the last ten to fifteen years have been on the lower side of the spectrum, with a median exit size of €39 million and an average of €80 million.
What’s notable is that, in recent times, not only we’re seeing more exits, but also larger ones.
eDreams through its IPO and subsequent transasctions remains the largest exit to date in Spain (not taking into account activity in the telco sector) at €1 billion, but since 2015 we’ve also seen companies such as idealista, Privalia, Socialpoint, Ticketbis or AlienVault reach successful exits of more than €200 million.
This is also visible below.
While it’s undoubtedly that the vast majority of exits are in the low single/double digits -the same is true when it comes to funding activity, which is vastly concentrated in the early stage-, there’s an increasing number of outliers.
Exits take a long time to happen
The graph above shows the amount of years Spanish startups needed to reach an exit. There’s a big concentration of M&A transactions that took place between 2 to 6 years after the founding date of the companies.
What’s very relevant is the fact that every single one of the exits larger than €100 million needed at least 7 years to get there. And most of that size, needed at least 10 years. It’s not news, but just another demonstration that large exits take a lot of time (and effort) to happen.
At K Fund we believe the number of exits (both in quantity and size) will grow in the next few years. The ambition of entrepreneurs is greater than ever before, we’re seeing bolder ideas being funded than in the past, foreign investors getting more involved in the local ecosystem and Spanish startups with higher global ambitions. Up and to the right!
