During the first half of 2024, venture capital activity was remarkably stable compared to the same period last year. Investment volume reached around €1.71 billion, down slightly from the same period last year, according to TTR data. This small decline suggests that the venture capital market maintains a similar level of dynamism, with steady interest in both small deals of less than €1M and deals of between €1M and €50M. The minimal difference between the two periods reflects an investment environment that, despite possible economic fluctuations and changes in the global landscape, continues to be strongly committed to financing innovative projects and the development of Spain’s scaleups.
For the second half of 2024, a positive trend in venture capital activity is anticipated, driven by several key factors. First, economic stabilisation in many regions and the gradual recovery of investor confidence suggest a more favourable environment. In addition, technological progress and growing demand for innovation in sectors such as green technology, artificial intelligence and biotechnology are attracting substantial investor interest.
For its part, the M&A market has shown a positive trend, with the number of deals remaining steady but increasing in size. The financial markets have shown signs of recovery and stability, which together with the accumulated demand, ongoing processes and the need for transformation of the business environment, suggests that the second half of the year will be very active.
Biotech, fintech, healthcare and technology, the rising sectors in venture capital
In the first quarter, venture capital deals, especially those totalling more than €1M, have largely focused on four sectors: biotech, finance, technology and healthcare:
- Biotech: The biotech sector remains an important focus for investors due to continued advances in scientific research and the development of new therapies and medical solutions. The pandemic has highlighted the importance of biotechnology, and investment in this field remains high.
- Financial: Fintech continues to attract significant interest. Digital transformation in banking, payment services and investment management are revolutionising the sector, and investors are looking to capitalise on these opportunities.
- Technology: Technology remains a central pillar of venture capital, with a focus on artificial intelligence, cybersecurity, and information technology. The growth of tech startups and the continued demand for advanced technology solutions ensure that this sector remains attractive to investors.
- Healthcare: Healthcare remains a global priority, and innovations in healthcare, telemedicine, medical devices and digital health technologies are receiving strong venture capital support.
In the case of the M&A segment, the financial and technology sectors have also been the most active. However, within the financial sector we find not only the fintech sub-segment stemming from the digital transformation, but also all that stemming from regulatory changes, the growth and geographic expansion of financial institutions and the real estate market.
The stability and projected growth in these sectors point to an optimistic investment outlook for the second half of the year. At Across Legal we have been able to perceive the dynamism of these markets through our active participation in numerous transactions related to these areas. A clear example of this is our advice on the Onum financing round, as well as on the sale of the artificial intelligence company Argilla to Hugging. We also advised aerospace company Ienai Space on the entry of GED Capital and the CDTI in its capital. In the healthcare sector, the various transactions carried out by Cuideo are particularly noteworthy, reflecting our experience and commitment to these constantly evolving sectors. Finally, the firm has always been very active in deals related to the fintech market, as evidenced by the acquisition of Voxel by Amadeus IT Group, advised by Across Legal.
The US, a major player in venture capital
In terms of the largest deals in the first half of 2024, the United States is a notable presence, both through US investors and scaleups, which account for a substantial part of global investment.
On one hand, American venture capital funds maintain a strong presence in the global market, actively participating in large financing rounds. In this regard, the Spanish fintech ID Finance closed a $150M round with i80 Group as lead investor. On the other hand, US scaleups are attracting significant investment due to their potential for scalability and global expansion. Such is the case of biotechs such as Engrail Therapeutics, which has raised $157M in a Series B round in which Ysios Capital participated.
In short, the presence of US investors and scaleups in the largest deals underlines the importance of this market in the global venture capital landscape. This is good news for Across Legal, as the firm has extensive experience in cross-border transactions, thanks to the international profile of our professionals, many of whom have been trained in jurisdictions such as the US and the UK. During 2024, Across Legal has advised several transactions in which American investors have participated, such as the financing round of the energy company Delfos, Wivi Visión (specialised in the treatment of visual dysfunctions) or the technology company Onum.
