Spanish VC firm Kibo Ventures has hit a first close of €80m for its fourth fund with a hard cap of €150m, which it aims to raise by the end of Q2 next year.

LPs include BBVA Spark, the founding family of Spain’s largest beer brewery Mahou, the family office of CVC Capital Partners’ managing partner Javier de Jaime and José de Mello Capital, the parent company of the leading Portuguese family-owned conglomerate.

CDTI Innvierte, the European Investment Fund and several founders from Kibo Ventures’s portfolio also participated.

Kibo has made two investments from the new fund. It led a $21m seed round for Theker, a robotics company building autonomous robots capable of operating in highly complex industrial environments, and backed a €3.3m seed round for AnyFormat, a generative AI and agent-based platform for businesses to convert documents into LLM-readable formats.

Expanding in Europe

Kibo will lead seed and Series A rounds with investments of around €5m, aiming to do 20-25 deals from the fund. It’s reserving 40% for follow-ons.

It’s primarily focused on B2B, Aquilino Peña, one of Kibo’s cofounders and managing partners, tells Sifted. “We might consider B2C but that is rare,” he adds.

The firm is particularly interested in businesses specialising in data management. “It’s becoming a huge issue for companies in terms of size and cost,” says Peña, “you can give that away to the hyperscalers but they keep charging more and more.”

It also wants to back cybersecurity startups. “We’re seeing a number of companies working on automation and agents within cybersecurity,” he says. “Corporations are starting to go from passive and defending against bad actors to understanding what their plans are.”

Vertical applications of AI, in particular in areas such as sales and compliance are on Kibo’s wishlist, while the company is also weighing potential investments in defence and dual-use technologies.

Javier Torremocha, Kibo’s other cofounder and managing partner, says it’s seeing opportunities in defence in Poland, Finland, Sweden and the Baltic countries — those closer to the war in Ukraine.

Kibo has done a handful of deals in the past in other European geographies, but investing outside of Spain is a big part of its strategy for fund four. Peña expects to do 8-10 deals in jurisdictions other than Spain. The firm is also hiring in Paris, London and Berlin.

More European M&A

Torremocha says that European funds need to work on generating more exit opportunities in Europe, as the majority of acquisitions still come from US buyers.

“It’s something we consider from the very beginning of making an investment,” he says. “We ask founders to work on those relationships to have potential buyers as clients, and that’s usually where 95% of the M&A happens.”

“If you see all the buyers we‘ve had over time it’s very US based because most of our companies end up selling a lot there,” Jordi Vidal, one of Kibo’s partners, tells Sifted.

He adds: “We would love to have our technology stay here.”

A lot of that responsibility falls at the feet of large businesses on the continent. “We need corporations buying startups in Europe,” Peña says, pointing out most of its past portfolio exits have come from companies such as Apple, Paypal and Crowdstrike.

“There is clearly a need for corporations to start acquiring,” he says. “Instead of doing R&D they have to start doing M&A.”

Kibo will also look to give liquidity back to its current investors by doing more secondaries. “For early-stage funds like us there’s an opportunity to search for secondary opportunities and generate DPI from non-M&A situations,” Torremocha says.

“I think that was one of the learnings from the 2021 hike in the market. You need to be more practical looking for those situations.”