RED Capital Partners, a new venture capital firm with offices in Madrid and Tel Aviv, is to launch RED Ventures Fund I, EMEA’s largest VC fund investing exclusively in high-growth tech companies founded or co-founded by women.
RED Ventures Fund I channels the exchange of technology between Israeli and European companies and opens opportunities for Israeli companies to enter the European market. The fund also invests in European technology companies, with a particular focus on Spain, looking to expand internationally, or to access Israeli innovative technology.
With a target size of EUR50 million, the fund will back up to 10 portfolio companies. RED invests in previously funded companies with strong and differential technological components and sustainable competitive advantages. RED assumes the role of lead, co-lead or sole investor in all investment rounds writing equity tickets of up to EUR10 million from RED Ventures Fund I, plus the possibility of channelling additional capital with co-investments from its LPs.
RED has developed a thorough investment thesis focusing on opportunities in sectors that are undergoing a deep transformation cycle, where Israeli companies are world leaders and in which RED can add significant value, such as Agritech, Foodtech, Artificial Intelligence, Cyber Technology and Health.
One of the distinctive features of RED is its “company builder” approach, as the VC firm dedicates resources and implements a hands-on strategy to develop its portfolio companies into global leaders. That’s why RED will occupy a seat on the board of each one of its portfolio companies to work closely with the CXOs on business model definition, product-market fit, go-to-market strategies and identification and reach out to potential customers and partners in Europe, United States, Latin America and Asia.
With more than 30 years of accumulated experience in investments, building companies and creating value, RED’s team has a broad sector expertise, an excellent reputation and a global network of top-notch contacts.
This pioneer venture capital firm is led by Luz Ramírez, Founder and Managing Partner of RED Capital Partners, who has 15 years of experience in the European and Israeli venture capital scene after being an entrepreneur, a VC Fund Manager, and a VC Fund-of-Funds Manager. She has worked as a Senior Fund-of-Funds manager at the European Investment Fund (EIF). Previously, she was Fund Manager at Corsabe, a EUR50m Spanish VC fund including companies such as lnfojobs Internacional, Oryzon and Softonic in her portfolio.
Apart from having an excellent investment team with international experience, RED has a network of prestigious advisors composed of veteran investors, serial entrepreneurs and corporate executives.
Furthermore, RED has local presence and market-leading networks in Europe and Israel. RED also has a privileged position and network in the Latin American market, especially in Mexico, Colombia and Brazil, providing a strong support for its portfolio companies’ ambitious internationalisation plans.
RED will be the partner of choice for companies promoting diversity. The VC firm will strive to invest in companies proactively working in the creation of inclusive and diverse leadership teams in terms of gender, ethnicity, religion, age, sexual preference, disability and country of origin. This is because several studies have proved that companies with at least one female founder and diverse teams produce higher financial returns and have lower failure rates.
The GP has been authorised by the Spanish Securities Market Commission. King & Wood Mallesons acted as a legal advisor.
Luz Ramírez, Founder and Managing Partner of RED Capital Partners, says: “There exists an enormous opportunity to invest in women-founded companies, who historically have received less venture capital funding despite leading projects that generate higher returns and with lower failure rates. Some VC firms with a gender lens focus have been launched in the USA, but RED Capital Partners is the first VC backing this strategy at the European and Israeli level.”
Europe-based women-founded startups received only 11 per cent of venture capital funding in 2017, according to PitchBook data. This is the result of a number of factors such as: (1) investor’s prejudice with women-led projects outside of traditionally feminine sectors, such as Cybertech, Agritech, etc. (2) women’s projections tend to be more conservative when they pitch their businesses to investors (3) women tend to ask for less funding, according to Wharton Business School’s study “Tracking venture capital with a gender lens”.
Despite their difficulty in accessing funding, there is an ever-growing number of women-founded start-ups. According to South Summit’s “Entrepreneurial Map”, 22 per cent per cent of the Spanish start-ups were founded by women in 2018, representing a significant increase from 18 per cent in 2017. RED expects that more women will launch new startups as their access to funding improves.
Additionally, women-led startups failure rate is of 22 per cent, while men-led projects stands at 52 per cent, according to South Summit’s Entrepreneurial map. Despite receiving far less funding, startups with at least one female founder generate 10 per cent more in cumulative revenue than only men-led ones, according to the “Why women-owned start-ups are a better bet” report, made by Boston Consulting Group in partnership with accelerator network MassChallenge.
Consequently, RED will capitalise on a historic market opportunity to invest in a booming segment with lower risks and higher financial returns while promoting diversity and inclusion in the startup ecosystem.
