10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Investment Record high Private Equity & Venture Capital1 investment in Spanish companies in 2022. Despite the change in the landscape starting in the first quarter caused by the geopolitical conflict, Private Equity & Venture Capital investment2 in Spain in 2022 totaled €9,238M3, the best figure on record, surpassing the record reached in 2019 (€8,526.9). This represents growth of 22% as compared to 2021 (€7,527.7M). 86% of total investment was allocated to new investments4, 12 p.p. higher than 2021. The remaining 14% (€1,281.6M) was allocated to follow ons. A comparison between the two main segments of this sector shows that Private Equity investment reached €7,113M (+30% from 2021) across 181 investments. Ven-ture Capital investment set a new record high, totaling €2,124.6M (+1% from 2021) across 779 investments. The bunching effect of Venture Capital and Private Equity investment on many of its transactions, given that the equity provided by Venture Capital and Private Equity5 GPs is accompanied by the financing of other investors, is referred to as the (total) transaction value.6 In 2022, this figure totaled €18,721M (+36% from 2021), of which €15,303.6M were Private Equity investments (€7,113M in equity + €8,190M co-invest-ment and debt) and €3,417M were Venture Capital investments (€2,124,6M in equity + €1,292.8M co-investment). As in recent years, the closing of several large transactions7 (equity investments over €100M per transaction), made exclusively by international funds, together with intense middle market activity8 (equity investments between €10M and €100M), with both Private Equity and Venture Capital funds9 recording record highs, contributed to excellent investment performance in 2022. The extraordinary journey of Private Equity and Venture Capital in recent years, supported by the factors already addressed in previous reports, including positi-ve economic outlooks, numerous investment opportunities in Spanish companies, investor appetite, abundant equity and debt liquidity as well as monetary policies around low interest rates have all resulted in record high investment in 2022. This record high was supported in large part by the intense activity seen in the first half of the year, during which period transactions incepted in 2021 were closed. Specifi-cally, in the first half of 2022 investment volume totaled €5,656M (+195% from the first half of 2021), compared to the second half of the year, with €3,582M in invest-ment (-36.7% YoY). The lower investment in the second half of the year reflects the consequences of a new global context of uncertainty caused by the geopolitical si-tuation and its impact on the macro economy. Looking to the coming months, experts agree that investment activity will be increasingly difficult, especially for transactions requiring bank debt and greater caution in investment decisions. Nevertheless, dry powder available for Venture Capital and Private Equity GPs and their proven ability to adapt to different environments, the interest of international funds in the Spanish market and the commitment to strengthening and diversifying businesses into strategic sectors, together with more favorable growth prospects for the Spanish economy10, will continue to drive investment activity, albeit at a slower pace. In this regard, in the first quarter of 2023, Venture Capital & Private Equity is estimated to have invested €2,172M, representing a 29% decrease from the first quarter of 2022, in 219 investments. The intense investment activity of international GPs11 in recent years has played a key role in the growth of the Venture Capital and Private Equity sector in Spain. In response to the attractiveness and abundant opportunities offered by the Spanish industrial fabric in relevant sectors such as industry, technology, healthcare and energy, total investment of international GPs in Spanish companies reached €7,406M (80% of total amount invested in Venture Capital and Private Equity in Spain), the best figure on record for these funds, surpassing the all-time high from 2019. The presence of international GPs in 2022 shows a growing investor focus on investment in a wide array of projects, both in mature and early stage businesses. Specifically, in 2022, international funds closed a total of 224 investments, eight times higher than the number of transactions recorded 10 years ago (27) and second best figure on record, behind 2021 (236 investments). Following the trend of recent years, the activity of international GPs stood out in large transactions (equity above €100M). As was the case last year, investment in the middle market also stood out, surpassing the activity of private domestic GPs, who had historically led this segment. In addition, the increasing momentum of international funds in financing Spanish start-ups, and in particular technological and innovative scale-ups with growth potential, has been key to strengthening the Spanish entrepreneurial ecosystem, leading to a new record high in Venture Capital investment in 2022. Furthermore, domestic private Venture Capital and Private Equity firms invested a total of €1,686M (+25% from 2021), matching the previous maximum figure of 2019, across 594 investments (+7 from 2021), a new record high. As in recent years, the contribution of Private Equity GPs mainly focused on the middle market12, thus driving the funding of growth companies. By number of investments closed, domestic private Venture Capital GPs stood out again. Direct investment activity by domestic public Venture Capital and Private Equity firms increased to €145.8M (+18% YoY) across 142 investments (in line with 2021). Likewise, the public sector continued supporting Venture Capital and Private Equity through its intense investment activity (as Limited Partner or “LP”) both in Private Equity and Venture Capital vehicles, as further explained in the “Fundraising” section of this report. A total of 665 Spanish companies (90% SMEs) received Venture Capital & Private Equity funding in 2022. Regarding the number of investments in 2022, a record high of 960 investments13 in 665 companies was recorded as well. The proportion of new investments to expansions of previous investments has maintained basically the same ratio since 2014. Specifically, 60% of investments were directed towards new companies14. Between 2017 and 2022, the Venture Capital and Private Equity sector has funded approximately 3,068 companies, approximately 90% of which are SMEs. Notes