10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2023 2017 2018 2019 2020 2021 2022 € Millions Other LBO/MBO/MBI/LBU Growth Late stage venture Start-up + other early stages Seed Stage distribution of Venture Capital & Private Equity investments Source: SPAINCAP/webcapitalriesgo Others Leisure Other Production Communications Agriculture Financial Services Others Services Consumer related products Energy & Natural Resources Biotechnology Computer related Industrial Products & Services Health related Investment Notes D espite lower activity in the large market (transactions with equity investments above €100M) and the middle market, leveraged transactions13 accounted for 54% of investments this year. Investment by development stage of the investee company in terms of volume was affected by changes in monetary policy raising interest rates throughout 2023. Leveraged transactions stood out over other categories; totaling €3,630.3M in 2023, representing 54% of total investments, compared to €5,959M in 2022. Buyouts fell significantly from 70 in 2022 to 52 in 2023. This decrease in buyouts can be explained to a great extent by the tighter conditions in the debt market due to higher interest rates, although there is a growing range of alternative financing available through corporate bond funds that are increasingly active in the Spanish market. International funds invested a total of €3,219M in buyouts, across 25 transactions (compared to €5,332.9M and 37 investments in 2022). This decrease in volume is primarily due to the lower number of large investments (>€100M in equity) and middle market investments (equity between €10M-€100M) closed by these funds. Domestic Venture Capital and Private Equity managers reduced their investment in buyouts to €411.2M across 27 investments (compared to €626.4M in 33 investments in 2022).The financing of growth in mature companies (growth capital14), with €1,170.7M invested, reached a new record high. Yet again domestic GPs led in this category, investing €743.3M in 81 transactions. In total, 100 growth capital investments were closed, far from levels seen between 2007-2008, years that saw around 160 investments p.a. A majority of these transactions were carried out by domestic entities (81 investments). [A list of the main growth capital and buyout investments is provided in page 39]. The “replacement” category15 came in third thanks to several large equity investments over €10M. Investment in start-ups through Venture Capital GPs recovered 2020 levels with investments totaling €899M (-57% from 2022). This decrease is explained by the fewer investments closed in late stage ventures16 (>€10M) compared to 2021 and 2022, as investors remained cautious in response to the new macroeconomic environment when considering to support innovative projects. [A list of the main investments in early stages (Venture Capital) is provided in page 43]. By number of investments, companies in start up stages (Venture Capital) received the most investments with 687 closed (81% of total), the third best figure on record. A total of 312 investments were recorded in other early stage17, followed by 160 investments in start-up18, late stage venture (152 investments) and seed19 (63) stages. For a detailed analysis of investments in the seed, start up, other early stage and late stage venture stages see Chapter on Venture Capital (page 29). The remaining investee companies, by number, belong to the replacement20 (4 investments) and other21 (1 investment) categories.