After a one-year hiatus due to market uncertainty, investments expected to be ‘substantially’ lifted: funding rounds yielding one to ten million returns
Detect breast and lung cancer with machine learning technology, identifying the right investment property or getting advertisements based on what we see on the Internet are some of the technological solutions produced in Spain in recent years. Its creators, KeyZell, PropHero, and Seedtag, respectively, are three startups using artificial intelligence to revolutionize any industry. The entrepreneurial world also expects a ‘large’ return on investment, with funding rounds of between one and ten million euros blocked so far due to the rise in the cost of capital. Regarding the total investment volume, it will grow, although it will not reach the figure reached in 2022 of 3,300 million.
no doubt, AI will be the fastest growing field in 2023. “There is a lot of interest in AI because of the big announcements,” says Íñigo Laucirica, Investment Partner of the Samaipata investment fund. The latest example is the implementation of the ChatGPT system, which produces written language. “There will be a whole start-up industry that automates conversations and documents that didn’t exist before,” says Miguel Fernández, CEO of the start-up that provides financing solutions to Capchase entrepreneurs. In the workplace, employee interviews can be facilitated in virtual meetings using Raddle, and dental x-rays in biotechnology are done instantly with Allisone.
The sector also shows up in 2023 bets fintechRevolutionizing finance since 2021: According to Gonzalo García, Business Analyst at Juan Roig accelerator Lanzadera, 25% of European funding rounds have been allocated to these projects. For those who are just starting to invest in the stock market, StockFinck helps them make the best decisions with daily forecasts. And there is room for start-ups in the real estate world. Laucirica assures that “there is a lot of value to be extracted and they will do very well in the coming months due to the economic outlook” because they “remove intermediation in the market and contribute to digitization in the industry.” Proptech searches were also initiated for mortgages. This is the case of Colibid, a platform where banks and brokers bid for mortgages.
If we talk about the investment volume, A boom like the one experienced in 2021 is not expected, but a gradual recovery of major funding rounds is expected. “The most stopped tours in 2022 were the big ones, but they will be back in 2023,” explains Laucirica. García refers to investments of 1 to 10 million euros or higher, although “it will be difficult to get past 2022 next year”.
distant expectations
Fernández says the funds have a lot of money they don’t distribute to companies, and that’s because “there is still uncertainty in the market and their prospects are far away.” Also, as a result of the increase in the cost of capital, valuations and rounds will tend to decrease. “The challenge for entrepreneurs is to be more efficient at adapting to what funds demand”Garcia points.
In terms of startups, the prospects for the next two years are positive because, according to Manuel Nieto, co-founder of investment vehicle First Drop, “there are a lot of cuts to tech companies.” “A lot of talent comes out of these companies who don’t consider working for other companies and prefer to create their own,” he says.
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2021 has been the peak year for start-ups, With an investment volume of 4,300 million euros, 2022 was a transitional period. The fruit of this transformationIn this period of convergence of successive interest rate hikes, inflation and international conflicts, the funds preferred to keep their capital in the last half of 2022. They will bring clarity and give greater certainty to those seeking funding.”
In recent years, Awareness of environmental and social challenges has shaped the habits of young people and the new projects promoted with them. “More and more public assistance is coming from Europe on all matters related to reducing the carbon footprint, and many projects are being created for mobility and new energy problems,” says entrepreneurs Nieto. New trends began to rise in 2022 and will be repeated in 2023. According to the report published by the Aticcolab accelerator, the most developed sectors were health and welfare, sports and tourism. Impact investment is skyrocketing, “as new generations eat alternative proteins differently, consume differently, and exercise a different mobility,” Nieto said. “There’s a lot of movement in the energy world, especially renewable energy,” says García. Some examples are Onyx Solar, a company from Ávila that produces photovoltaic glass for buildings, or Sheedo, a startup that produces paper from textile waste.