INSUBCONTINENT EXCLUSIVE:
Target Global, a pan-European VC firm with €700 million under management and a broad investment canvas spanning SaaS, marketplaces,
fintech, insurtech and mobility, is opening an office in the Catalan capital.
Investor director, Lina Chong, will lead the expansion into
Spain, having relocated to Barcelona from the fund Berlin headquarters
They&re setting up in a co-working space on Avenue Diagonal in the center of the city.
Target Global backs early and growth stages startups,
as well as doing some seed investing
The firms tells us it expecting to do between one and three deals per year out of the Barcelona office, envisaging the same mix of
investments in terms of early and growth stage.
We&ve been seeing decent deals in both stages
Across Spain,& says Chong
&There is just more — by numbers — way more early stage seed than A
I think that just the maturity of the ecosystem here.
Dialling up a local presence across Europe means Target Global can pitch founders on
being able to connect talent and expertise across key regional startup hubs, while also plugging into a wider international network
(It also has offices in London, Tel Aviv and Moscow.)
From a VC perspective opening local offices is of course about deal flow
Being on the ground to take more meetings widens the pipe, increasing the chance of an early shot at the next high growth business.
That
important because Europe startups have many more options for early stage funding than in years past, and founders are getting smarter about
Boots on the ground means more time for all important relationship building.
Target Global describes itself as something of a startup —
it was founded in 2012 — which means it competing for deals with VCs that have more established brands and networks
Becoming a familiar face in the room looks like a solid strategy to growth hack its own network.
We are a global or a pan-European fund but
for an entrepreneur here we want them to feel that we&re local; we understand the ecosystem; that we have deep rooted connections; that
we&re committed; that we show up,& general partner Shmuel Chafets tells TechCrunch.
It all a function of time and effort
Just being here and having breakfast with people, lunch with people and helping out even the people we don''t invest
You get more connected and then you start to see more deal flow.
This is the second local office it opened in Europe this year, after adding
a London base in April — making it a flattering pick for Barcelona
Plenty of other European hubs are being passed over in the city favor this time, be it Madrid, Lisbon, Paris or Stockholm.
Chafets says the
firm looked at five or six other cities but settled on Barcelona for now, though he won''t rule out opening more offices in future
&Never say never,& he quips.
Having been a regular visitor to Barcelona for a number of years he talks enthusiastically about the creative
energy motivating entrepreneurs — saying the city ecosystem reminds him of how Berlin felt a few years ago
It looks like it just about to happen,& he reckons.
From what I&ve seen Barcelona is sort of strong in creative
It always pretty strong in mobile, historically
It had more mobile successes… SaaS, particular smb SaaS, is pretty good here
I think it would be harder to find enterprise sales companies and companies building these very deep tech stuff right now
But definitely in the marketplace, smb SaaS space, mobile space you see great stuff here.
That ties into the creativity, because it a
product driven environment — not a tech driven environment
I think Berlin is a very operationally driven environment, Tel Aviv is a very tech driven environment, this is a very product driven
environment — which actually complements well our other hubs.
There some pent-up energy here,& agrees Chong, who says they&ve already come
across a &surprising& amount of deal flow
&Again it very similar to Berlin where there a lot of willingness and there a lot of dreaming but there not a lot going on
So I think the younger people here they&re creating that.
Target Global has been testing the water prior to formalizing its commitment to
Barcelona, and has four local portfolio companies which it ploughed around €20M into over the past 12 months
Its biggest regional investment to date is in business trip booking SaaS, TravelPerk
It also backed flatmate matching platform Badi; online doctor booking platform, Doc Planner (which relocated from Warsaw, Poland after
merging with local startup Doctoralia); and medical chat app MediQuo.
From a wider perspective, Barcelona tech ecosystem has been gathering
momentum for years, helped by the annual presence of the world biggest mobile tradeshow (MWC) — as well as more specific pull factors for
startups such as a relatively low cost of living and an attractive Mediterranean location.
It a great place to live and you can''t ignore
&In Europe if you&re a team and you&re an international team there are very few places you can live.
This combination means Barcelona is now
home to a growing number of high growth startups, including Target Global portfolio firm TravelPerk — as well as the likes of on-demand
delivery platform Glovo; and RedPoints, which sells a SaaS to brands for detecting and acting against the sale of fake goods online, to name
two other notable examples.
Other local startups grabbing attention and investment in recent years include 21Buttons, Holded, Housfy,
While hyper local mobile marketplace startup Wallapop — which was ona growth tear in an earlier wave of ecoystem growth — remains the
go-to classified app on every local phone (though it merged with a US rival back in 2015)
The city even has its own youthful scooter startup (Reby) which has refused to be put off by some tough regulations controlling rentals —
and has recently been applying AI to try to make like a good citizen by automatically detect poor parking.
Mobility is a major area of focus
for Target Global — which last yearannounced a dedicated fund (with an initial raise of $100M) for startups working to disrupt
Although, when it comes to stand-up e-scooters the firm is already invested in Berlin-based Circso will presumably be looking to spend
Barcelona is the perfect city for scooters,& says Chafets
&Scooters can really change the way the city works
It also small and has relatively good public transportation from outwards in — but they need to be regulated
You need to really make sure that [they aren''t a misused nuisance].
He notes that European regulators have been relatively quick to spot
the risks of shared mobility, and close off the antisocial expansionist playbook that played out in some US cities during the first wave of
scooter startups — when people trolled Bird by hanging scooters in trees (or, well, worse) — but he sees that as good news for building
a sustainable future for alternative mobility.
It a great challenge and it will be a huge money maker — that where we want to be right,
multiple trillion dollar businesses!
Away from disruptive developments on the ground in Barcelona and the other local tech hubs that Target
Global is intending to explore from its new base in Catalonia, it also views Spain as a low risk gateway to opportunities on the other side
of the Atlantic.
There a decent local domestic market and there is a natural second market in South America,& says Chafets
&Actually in the US too — because Spanish is the second most commonly spoken language in America so when you start a company here you have
that second market built in
Which is very important — you can scale it.
Latin America is a fascinating market right now, it a fascinating time,& he adds
&So in a way it a way for us to make a side bet on Latin America without going out of Europe and investing far.
We&ll share a full interview
with Chafets and Chong on Extra Crunch.
Target Global is firming up its bet on Barcelona entrepreneurs
