Aquilino Peña is one of the founders of the venture capital fund Kibo Ventures. Over the next five years, they are planning to invest around 80 million euros in the most promising startups in the market, such as Vilynx, a company based in Barcelona and Palo Alto that hopes to compete in the world of videos against the all-powerful IBM.
Climbing mountains is one of the hobbies of Aquilino Peña, co-founder of the capital fund Kibo Ventures. It’s one of the few places where his phone is not always ringing. “I think that’s why I like the mountains so much; nobody calls me and I’m able to disconnect,” he tells us laughing at the other end of a phone, paradoxically.
Kibo Ventures was formed in 2012 to fund digital startups. That year, in the words of Peña, “there was no venture capital and my partners and I were coming from a time of business angels. In other countries, there was such a thing as venture capital but here it was very limited. That decided it.”
Over the last five years, Kibo Ventures has shaped itself to the market. Now, “entrepreneurs have a lot more experience, submit projects that make a lot more sense, and they are a lot more ambitious.” Kibo Ventures also experienced a shift: “In the past, there was no money in the initial phases of startups, and rounds involved 500,000 to one million euros. We participated. Now, there are a lot more players in these stages and we have moved to the next level; and we focus on rounds of two to five million euros that involve international investors.”
Peña’s team prefers companies that already have “a face and eyes; a determined team and a clear and specific mission with something that makes us think they have the correct vision: customers, the number of users or the contracts they have finalized, for instance.”
They started with a 43-million euro fund. The second (launched in September 2016) is currently at 71 million euros and will stay open until 2021. Behind Kibo Ventures we can find companies such as Carto DB, trip4real, Flywire and Jobandtalent.
Regarding the latter, Peña does not shy away from the questions about the difficult phase the Spanish startup is going through: it fired part of its workforce and has registered major losses. “We weren’t surprised by what happened insofar as Jobandtalent grew a lot more than its circumstances allowed. The team had to implement job cuts because the number of people was turning it into a business model that the company did not want.” The investor adds that albeit the current situation affects them as investors, “I trust the team and the new model they are building; we’re pretty confident.”
The successive share capital increases performed by startups to keep alive. Are they a good thing? Peña explains that the fund scrutinizes every share capital increase “because they reduce our percentage. For us, it’s an issue both when a company raises very little money and when it raises too much for what they want to do. You need to be very cautious about the amounts and how you use the funds.”
Kibo Ventures has a team of 8 people and investment decisions are made by the three partners. “We work way above the companies and when we invest we want them to have been around for at least 18 months before they think of going into the market and looking for funding rounds. Rounds distract the teams a lot.” To this end, they meet with the entrepreneurs to reach an agreement on the budget and the company’s expenses.
“Revenue is uncertain while expenses are completely certain and this is what you need to look at to avoid problems,” he explains before he goes on to add that they look at the project’s “execution capacity and ambition. Good ideas are not enough.”
One third of Kibo Ventures’ investments were made in the USA. For the last five years, they have invested in 31 companies, sold three, closed four and three are currently going through a difficult time. The rest, according to Peña, “are pretty healthy. I think one third of these 31 companies will not succeed; around 50% will register positive return; and around 20% will perform extraordinarily.”
Kibo Ventures’ next venture is videos. In the next few days, they will close an investment with one of IBM’s competitors, the startup Vilynx (based in Barcelona and Palo Alto), which uses artificial intelligence and machine learning to analyze videos and obtain thousands of metadata.
Before signing, the investor hopes to disconnect on the mountain. Just for a few hours. Then, he will climb back down to answer the next call.