Spanish Idealista sale marks technology sector turning point: experts anticipate " 2 or 3 very important years" - More than 1.300 million euros. That is the amount by which the largest operation in history in the Spanish technology industry has been closed. It starred yesterday idealist, who announced so that he changed hands. Its owner is now the Swedish EQT fund.
With this move, 2020 is already, on paper, a record year. In the first two quarters of the year alone, 15 sales —mergers and acquisitions or M&A, for its acronym in English— were closed for 1.100 million euros.
According to CapitaliQ data, 2019 closed with 28 transactions totaling 1,630 million euros.
With the purchase of Idealista by EQT, the volume in 2020 will exceed 2,000 million euros. And there is still a fourth quarter that some experts predict will come " strong."
This year marks a turning point for the Spanish tech sector. Experts consulted believe that it confirms a trend that was already seen coming: sooner or later, the industry would begin to give symptoms of its consolidation with exits of the caliber of idealist.
But there were also calls for caution, given that the COVID-19 crisis has upset the plans of many companies and many operations.
Spanish Idealista sale marks technology sector turning point
However, so far this year there have been several milestones in the financing Chapter, such as the round of 17 million raised by Ontruck, a digital platform for road freight transport, or the 15 million of the startup specialized in software and services for Human Resources Factorial. Odilo also took a step forward by raising 10 million and showed the relevance that edtech is beginning to have in the sector.
In the field of corporate operations, Square, the signature of Jack Dorsey —founder of Twitter - was made with the Spanish company Verse, a startup focused on mobile payments. Although the details of this operation did not transcend, it did accentuate last June the path that Freepik, a' Google ' of digital images founded in Malaga, opened after being acquired for more than 200 million euros. On that occasion, the operation also bore the seal of EQT.
And GTI, a Spanish firm specializing in software, was acquired in June by the Italian group Esprinet for about 34 million euros, according to sources close to the operation that were consulted by expansion.
But it is now, with the purchase of idealist-goes from one fund to another fund, from Apax to EQT, for 1.300 million -, when experts consulted by Business Insider Spain point out that "the turning point"has arrived.
Now that the Spanish technology sector is showing signs of taking off, one wonders whether this is a consolidated trend or a cyclical issue favored by the rise of digitalisation in the economy that has caused the coronavirus pandemic in sectors as diverse as banking or the automobile.
GP Bullhound is a British investment bank specialized in technology and its face in Spain is that of Miguel Kindelan. Faced with the volume of corporate operations and the exits that the Spanish technology industry is starring, Kindelan sums it up as follows: "it is not circumstantial by COVID-19".
"The issue of idealist, in particular, is a company with 20 years of experience, and that is very resilient to cycle changes," he details. But the fact that in 2020 there were two transactions " as relevant as they can be Freepik and idealist "reveals, in his opinion," the very strong bet that there is for this country on the part of foreign investment".
Bernardo Hernandez is the CEO of Verse, the payments startup that has also signed a milestone this year after being acquired by Dorsey, the founder of Twitter. But Hernandez was also a founding partner of Idealista when the company was born two decades ago.
For him, the sound operation that has closed the real estate portal after the purchase of EQT is "the natural consequence of the maturation of the sector, which will take on more size. These things take time: in technology we are used to seeing rapid movements, but here there are 20 years of work, which is said soon."
They also speak from the field of venture capital. Aquilino Peña is co-founder of Kibo Ventures and president of Ascri-the venture capital employer-and agrees with his colleagues: "the operation of Idealista responds to the sector is maturing. It's 20 years of work, this is not a day-to-day kick."
The Global Director of entrepreneurship of Telefónica, at the head of Wayra, is Miguel Arias, and also believes that "the ecosystem is reaching a greater maturity, as is natural after the investment rounds and the internationalization of projects in the last year".
Arias also abounds in the "big news" that implies seeing "the appetite of private equity funds for the Spanish tech sector". EQT has starred in the two most important corporate operations of the year: Idealista (1.300 million) and Freepik (more than 200 million).
The same says Peña: "with this operation it becomes clear that private equity funds are buying tech firms and this turn to digitalization not only occurs in startups or consolidated firms, also in private equity. That, for those of us who invest locally, gives us more chances of getting out."
"I would like an idealist to go public," Hernandez said. "You can still do it," clarifies the CEO of Verse. "The ecosystem is maturing and is made up of many agents. We will see larger and larger venture capital funds, companies with increasingly profitable business models, and it should not surprise us that this record of 1,300 million in 5 or 10 years is surpassed by an operation of 15,000 or 20,000 million."
Peña points out that " now come 2 or 3 very important years. Increasingly, traditional firms are being forced to digitize. And one way of digitalization is the acquisition of large companies."
It is difficult to anticipate if you will see a corporate operation of the same caliber as the one that has starred idealist this week in the remaining months of 2020.
But Miguel Kindelan, of GP Bullhound, details that Spain " has Industries large enough to justify large companies and large projects. There's size." From this it is explained, For example, that Idealista has starred in one of the corporate operations of the year being the reference in the Spanish market but with presence in just a few other countries.
It is not necessary to have a global product to attract the interest of international investors, considers Hernandez. "There are always business models," he recalls. Faced with startups in a hurry to become a unicorn-to reach the 1,000 million valuation -, the CEO of vedere points out that "in the end a high valuation is temporary; it is a promise of business model".
"Idealist what he has done very well has been not to carry the promise ahead of reality. You have to be patient and now there is a much more mature ecosystem with investors, with a whole fabric of venture capital and a fabulous new generation of entrepreneurs, like Oscar Pierre from Glovo."
With these wicker, Kindelan expects " a strong fourth quarter last in terms of operations. There are many that have been delayed by COVID-19 and have not yet been closed. There is a lot of investment to be made, a lot of funds with the need to invest that money."
"I would wait until the last quarter of the year," he says. "All these positive signals for the market are contributing to more trading closing. Especially when you have the seal of international investors."
End of Spanish Idealista sale marks technology sector turning point