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The awakening of venture capital in the Valencia Region in the middle of the pandemic

| News | Corporate Law and M&A

Ignacio Aparicio explains that in difficult economic times, new opportunities always arise and that is the reason for this investment spirit, in Valencia Plaza

Up to seven operations known in the sector as M&A (fusiones y adquisiciones in Spanish) have been known so far this year in the Valencia Region, mostly involving foreign firms taking shares in local firms. Until the outbreak of the pandemic, there was intense activity in corporate operations which, however, slowed down during the months of confinement while waiting to see how the situation would evolve. Venture capital investment at the national level fell by 35% last year to 5,561 million euros. The 'coronavirus effect' had much to do with the social and economic uncertainty, as reflected in the provisional data presented last Thursday by the Spanish Association of Capital, Growth and Investment (Ascri).

"The money is there and in crises there are always important opportunities," explains Ignacio Aparicio, managing partner of Andersen's corporate practice. "The minimum ticket to invest is going down to attract more money to the market. There is a lot of diversification in investment and it is not only concentrated in a single project," he points out. In his opinion, many are waiting for 'bargains' from companies that, out of necessity, want to look to the private equity market for financing instead of going to banks.

"Companies are now more receptive. When you have difficulties in your company and you need money, the way to obtain resources is quite limited. A lot of operations are driven by the need that companies have. And, instead of looking for money from banks, their strategy is to consider an industrial partner to help with management", Aparicio points out.

However, there are others that are also attracting the attention of private equity. "At the European level, with the Green Deal and Next Generation funds, the focus is on investments in sustainability and this will also be reflected in investments in sectors such as renewable energies, water and waste management, biotechnology and the mobility sector. The healthcare, life sciences and technology sectors will also be on the rise because the pandemic has changed lifestyles," says Aparicio.

The full article can be read in Valencia Plaza.

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