“The lack of density and lack of local scouting teams means that Spain and Europe are playing at a disadvantage”
Cardumen Capital is a Hispanic-Israeli venture capital fund created in 2017, and regulated by the National Securities Market Commission (CNMV). The venture capital fund, cofounded by Igor de la Sota and Gonzalo Martínez de Azagra, facilitates privileged access to cutting edge technology on an international scale through the Israeli market.
In July, InnoCells invested 7.5 million euros in Cardumen Capital, which represented the entry of the digital business hub in Israel, as well as the expansion of its area of activity in a benchmark technology, talent and innovation hub.
What motivated the creation of the fund?
Previously, under the brand of Samsung Ventures, our team was the most active corporate investor in Israel. Under the Cardumen brand, our vision and goals are to transform ourselves into a specialist investor in high-level benchmark technology in Europe and Israel.
What was the fund’s initial objective?
Using best practices in Israel and Silicon Valley, the objective is to allow European investors to form part of technology disruptions associated with artificial intelligence, big data or cybersecurity.
What is the strategy?
Through our fund, we give financial and corporate investors access to technologies which are used as a basis for corporate digital transformation in Israel, the most dynamic entrepreneurial and technological system in the world.
We invest in B2B or B2B2C companies with a high technology component, and where technology has already been tested. We co-invest together with financial funds and corporate leaders and we gain access to seats on company boards. We position our startups, so that, as they are successful, they can be purchased by the largest technology and industrial groups. Our second fund, in the future, will also cover Europe.
Who is on the team?
Our team is currently made up of Gil Gidron, Chair and ex-partner at Accenture, he is responsible for the EMEA strategy; Gonzalo Martínez de Azagra and Roy Gottlieb, partners and ex-management team of Samsung Ventures Israel; Igor de la Sota, partner and ex-manager at Hilco Iberia; Roberto Saint Malo, Venture Partner and co-founder of Adara; and Enrique Burguillos, financial director with extensive experience in financial reporting and administration.
Furthermore, we have technology advisors who specialise in the specific areas in which we invest.
Which investors do you currently have under your belt?
Our investors include various high net worth individuals, family offices, asset managers and several corporations-such as Banco Sabadell and the Indian company IG Petrochemical, amongst others. In addition, we also have senior executives from IBEX 35 companies.
In what type of companies does the fund invest?
Our fund invests in corporate digital transformation technology. Specifically, we invest in Cybersecurity, Artificial Intelligence, Big Data and information and communication technologies.
To date, we have carried out operations with Binaris, a company which simplifies the cloud business management process through the 'serverless' concept and Humavox, a technology provider for wireless charging of all types of electronic devices. We have co-invested with these companies together with Lightspeed, Dell, Engineering Capital and Stanley Black and Decker.
Israel is the leading country in technological venture capital investment, with investment per capita which is 2.5 times higher than in the United States, and 30 times higher than in Spain.
In 2017, total venture capital investment in Israel amounted to 5,200 million dollars and divestments were carried out for the amount of 23,000 million dollars. As well as being the country which dedicates the highest percentage of its GDP to R&D, 350 R&D centres of foreign multinationals are located in Israel.
What does the European and Spanish entrepreneurial system look like?
The Spanish and European markets are becoming increasingly active. However, in terms of volume, and above all, density, they differ from the concentration in Israel. The crisis and initial success in the market over the last few years have acted as a catalyst for the European market, and we hope to see greater success in the future. Furthermore, we are hoping to see the development of greater expertise in venture capital in professional services such as lawyers, bankers and associated services.
The lack of density and lack of local scouting teams means that Spain and Europe are playing at a disadvantage. It is precisely these scouting teams who develop collaborations between startups and multinationals, they are the ones who make investments or even manage the purchase of startups. Due to a lack of these scouting teams in a lot of European regions, it is entrepreneurs who must travel to the U.S or Israel in order to gain recognition.
What are the advantages compared to Israel?
The European market has its own market which Israel doesn’t have, which is why its entrepreneurs are forced to travel outside of the country from the very first moment. Partly due to this reason Europe generates more success in B2C opportunities, whilst Israel stands out due to its purely technological innovation and B2B.
How would you describe InnoCells entry into the fund?
InnoCells entry in Cardumen Capital is fantastic news, and proof of the value that we contribute to large corporations.
Specifically, we offer access to the Israeli market, we generate strategic opportunities and we support entry into operations, we advise on investment and open innovation processes and we even offer a secondment in our offices. That is to say, the employees of these large corporations learn about our processes and best practices, in the same way as any other employee of our management company.