Leadwind completes €140m first closing to fund deep tech scaleups

K Fund, the fund manager of Leadwind, set up to promote companies with a disruptive and transformative technology base, has announced the first closing of its investment vehicle for €140m.

Launched in September 2021 by Spain-based global telco Telefónica together with K Fund, Leadwind was created with the intention of incorporating public and private investors and investing in the so-called deep tech scaleup businesses located in southern Europe, prioritising Spain and Latin America.

In this way, Leadwind aims to support digital transformation of the territories in which it is active, strengthening the maturity of the entrepreneurial ecosystem and driving innovation in scaleups with the ambition of achieving global reach. To support internalisation, the fund plans to set up its own office in São Paulo, Brazil, in the near future.

The target size of the fund is €250m and it has the capacity to make investments of at least €5m. The fund will invest at the intersection of technologies such as edge computing, artificial intelligence, data analytics, 5G connectivity, blockchain and cloud services, which are expected to be the enablers of the new business models that will emerge and have the greatest impact on the industry. In the six months since its launch, the Leadwind team has analysed more than 150 scaleups that are already working on these technologies.

At MWC 2022, the first vice-president of the Spanish government and minister for economic affairs and digital transformation, Nadia Calviño, announced that the administration would invest up to €70m from the ICO Next Tech Fund in Leadwind, thus becoming the main public investor in the fund, with a stake of around 35%.

Telefónica also contributes approximately 35% of the total investment, making it the largest private company in the fund’s portfolio. Along with the Spanish telco, other relevant companies have backed Leadwind with their investments, such as BBVA, Go-Hub and Satec, as well as institutional investors, such as Axis-ICO, and private family offices.

“Leadwind is a great example of how public and private collaboration can drive scaleup entrepreneurship, taking another step towards the maturity of the ecosystem by investing in more advanced stages of the companies”

The investment in Leadwind was made through Telefónica Ventures, Telefónica’s venture capital vehicle. This unit is designed to address the major challenges facing the telecommunications industry by strengthening new businesses and verticals aligned with the telco’s strategy, driving the business on a global scale but with a local presence. It currently has a portfolio of more than 10 startups invested directly and more than 120 startups invested through its network of nine venture capital funds.

“Leadwind is a great example of how public and private collaboration can drive scaleup entrepreneurship, taking another step towards the maturity of the ecosystem by investing in more advanced stages of the companies,” commented Irene Gómez, director of open innovation at Telefónica.

“We are confident that many more public and private organisations will join the fund, as investing in companies that will drive the technology that will be crucial in the future will help us to strengthen the business fabric and become a much more competent country.”