We’ve caught up with Yolanda Perez, director of Banco Sabadell’s BStartup – the bank’s programme supporting startups and scaleup through specialised financial services and investments, to look back at the bank’s role in supporting the innovation ecosystem and 4YFN along the years, and especially during a challenging 2020.
In a nutshell, for those who don’t know BStartup, what is it that you do?
BStartup is a department in Banco Sabadell that offers holistic financial services to the innovation ecosystem.
Based on years of experience supporting startups, we’ve developed a range of specialised banking services and products that adapt to the needs of the ecosystem: startups, scaleups and entities such as investors and accelerators. We currently serve around 3,400 startups, scaleups and other ecosystem players across Spain.
We also invest in early stage startups and currently we have 56 companies in our portfolio.
Besides that, we serve as an opportunity radar for the bank’s business units and for Innocells – the unit within the bank that leads its digital innovation strategy. We are closely coordinated with Innocells and other business units and are constantly on the lookout for relevant innovations and to enhance open innovation collaborations.
Tell us more about the startups you invest in.
We’re committed to investing in at least 10 startups a year. We target seed stage startups and provide an investment ticket of €100,000 per company. Our emphasis is on digital startups with a clear and compelling proposition, a strong and committed team, a big market and a potential to scale. We focus mainly in digital and ICT companies and have around 60% B2B and 40% B2C companies. While we are largely agnostic, we have also a specific focus on health (biotech and medtech) where we invest in around 3 companies per year since 2018.
Now that 2020 is behind us, how was your work at BStartup affected by the Pandemic this year? How did it affect your portfolio startups?
2020 was a tough year for everyone, without a doubt. Back when the crisis started, our efforts were almost entirely focused on supporting the 52 companies in our portfolio, as well as the many startup clients of our specialised banking offer. Since we work with startups in a variety of sectors, we’ve seen a rather diverse impact across our portfolio.
Luckily, about 60% of our portfolio are B2B companies, like RedPoints. SaaS may have seen a certain slowdown in closing deals, but they did not suffer significant business losses.
On the other hand, some of our portfolio companies like those operating in the tourism sector, sports or mobility, were exposed to a higher risk. We’ve been accompanying these startups very closely, supporting them in their financial planning and in their reaction to uncertainty.
Then there were also tremendous growth opportunities for some of our portfolio startups. This is the example of Signaturit – a widely accepted tool for electronic signatures. Also, some of our health startups benefitted from an elevated demand for their services too, like Qida, which offers home care solutions.
Have you been able to support startups beyond your portfolio in their hardship?
Definitely. We’ve been working around the clock to guarantee that our startup and scaleup clients can access the different public support schemes. We’ve organised online webinars to bring important information to the startup and innovation ecosystem in general. Naturally, we’ve also seen a sharp growth in demand for our loan products. We can safely say that during the first half of 2020, we’ve given more financial support to startups than during the entire year of 2019. We’re incredibly happy that we were in a position to be there for the startup ecosystem.
How was your investment activity affected?
In the beginning, it was looking like investments across the board were slowing down, but for us this wasn’t the case. Despite everything that has happened in 2020, we’re pleased to confirm that we have 10 investment deals approved for that year in Biotech and medtech, Fintech, Big Data, Cyber security and online brand. We’ve also had great news coming from portfolio startups, like three favourable exits.
This year is perhaps the year that marks the greatest leap forward in the digital transformation of our society. From your position as the startup programme of a leading bank, how do you see this aspect affecting both banks and startups in the sector?
The digitalisation of services has advanced greatly this year. Digital services have reached record penetration rates, not only in the general population, but also in the business world.
Fintech has taken a leap forward during the Pandemic due to the wider acceptance of digital banking products. We are seeing more and more collaborations between banks and Fintechs for the sake of accessing external development resources, rather than developing solutions in-house.
As a result, investors are showing elevated interest in B2B Fintechs, especially those with SaaS models and off-the-shelf solutions for banking entities. We’re also seeing increased interest in startups offering digital solutions in the areas of lending, scoring, reimbursement and claims. Another area of elevated interest for investors is that of digital startups offering financial management services to SMEs that have taken a hard hit from COVID-19.
Do you think the advances in digital transformation will have a long-lasting impact on the banking sector and society in general?
Over this past year, the public has grown accustomed to using digital banking services and this represents a clear opportunity for the sector. The underlying business model of banks has shifted in recent years, motivating banks to continuously search for efficiencies in their processes. The slow acceptance of online banking services by bank users was a limiting factor. But in 2020 this wall has been shattered.
In general, society has taken a leap forward in its digital skills this year. We are now a few steps closer to delivering the benefits and efficiencies associated with digital transformation, not only in financial services, but also in sectors across the board like education and healthcare.
Now that you’ve mentioned Healthcare, this is an area that BStartup is very active in. Why is a bank so interested in Biotech and digital health?
We’ve always felt that digital health was a field that represented a huge opportunity. Our first investments in health were Valencian-based Poribb and Barcelona-based Psious, which raised € 5M last year.
Following these first investments in 2018, we decided to structure a vertical programme aimed at supporting the transfer of biotech and medtech innovations into the market. We now work with a scientific/technical committee, including experienced health investors who help us in selecting the projects and accompanying them.
What type of Health startup do you support?
We enter biotech and medical devices startups at the pre-seed and seed stage, to help them push forward their developments and improve their investment readiness for subsequent funding rounds with specialised funds . In fact, we decide to enter at this very early stage in the lifetime of those companies to cover an acute funding gap.
At 4YFN, we are witnessing a “boom” of digital health startups in the local ecosystem in the past couple of years. In fact, our “Digital Health Hub” that focuses on startups and innovation in healthcare, is one of the most sought-after programmes. Do you too share this feeling?
Yes. We see accelerated growth in the Digital Health ecosystem at both national and local levels. Our most recent call for startups in Health and Biotech received a record number of over 140 applications from startups and spin-offs from across Spain.
In Barcelona a vibrant and tightly connected Digital Health ecosystem emerged in recent years, much thanks to the effort of public agencies and associations like Biocat and Catalonia Bio & Health Tech.
Once a year at BStartup, we organise the “Health and Bio team dating” event where we connect scientific teams with business profiles to complement their skills and help make great ideas a reality. We have some fantastic success stories we are very proud of, like a scientific group that met their future CEO and moved forward to launch a company together.
Maybe we should run an edition at 4YFN!
Sounds amazing! This would be a valuable addition to our Health hub programme.
4YFN works hard to instil the values of impact investing in the ecosystem and encourage entrepreneurs, investors and corporates to work to promote the UN SDGs. How do you treat societal impact and sustainability at BStartup?
We don’t have a specific mandate, but one of the first things we look at when approaching a startup is its impact on society. We look at this aspect even before entering the in-depth analysis of the financial, business and technical viability of a potential investment.
One of our first purely impact investments was Worldcoo, a startup that offers a fundraising widget for social projects. With the incorporation of their widget into eCommerce sites and big retail chains, thousands of social projects received funding. This is a great example of a startup from which we, as investors, enjoy a “double bottom line”: both financial and social returns.
We are proud to say that at present 30% of our portfolio companies are providing social returns: aPlanet, MiCuento, AEInnova, all the medical companies, etc.
Finally, we wanted to touch on your involvement at 4YFN. Banco Sabadell has been supporting 4YFN since the very beginning and we are very happy to have you on board as Platinum sponsor for 2021. How did you first get involved in 4YFN?
Back in 2013 we saw a few slides presenting a new initiative for startups during MWC. Immediately, we realised the unique opportunity this idea held for Barcelona and Spain: for the first time, there was a concrete effort to leverage on the multitude of business opportunities at MWC for the benefit of the startups.
The first edition in 2014 went beyond our expectations – it was spectacular and received impressive media coverage. It not only fulfilled the role of connecting startups to one of the most important events globally, but also helped strengthen the local ecosystem and position it as one of the leading hubs in Europe. Since 2014, 4YFN surpassed expectations and grew in numbers, impact and positioning. We’re very proud of our part in this success.
Each year, BStartup is present at 4YFN with a showcase of your portfolio startups and inspirational conference content. What are your goals when planning your participation at 4YFN each year? What’s in-store for 2021?
We always do our best to bring added value into the conference and share our experience and success stories. It’s a great opportunity for our portfolio companies – they make many relevant contacts, meet investors and sometime even sign contracts.
From the bank’s point of view, 4YFN is a wonderful source of deal flow and inspiration – we discover new business models and technological innovation in business. And our top directors always insist on visiting the event each year.
The contribution that 4YFN has made to the local ecosystem along the years has been tremendous. Beyond the link with MWC, 4YFN covers themes that would not be addressed otherwise and manages to appeal to a different public audience.
We’re very much looking forward to the 2021 event, to seeing and interacting with you all again – and sharing everything that we’re working on.
Same here! Thank you Yolanda for sharing your thoughts with us, see you 28/06-1/07 at 4YFN 2021!