SETT director general Javier Ponce and its audiovisual director María Coronado deliver a practical guide to Spain’s governmental investment drive now powering up companies in Spain One of the major industry narratives at this year’s San Sebastián Festival, running Sept. 18-26, will be the presentation of SETT, the venture capital fund of Spain’s Ministry for Digital Transformation.SETT director general Javier Ponce and its audiovisual director María Coronado deliver a practical guide to Spain’s governmental investment drive powering up companies in Spain: What it’s doing, why, and where it could go in the future. The companies it s investing in – with more to be revealed – are likely to be among the most dynamic in Spain.What, explained very briefly, are the objectives of SETT’s Spain Audiovisual Hub strategy?Javier Ponce: SETT is a public investment entity that manages investments in strategic, transformative sectors, including the audiovisual industry. It serves as a public catalyst for growth, employment, innovation and talent—all core elements of the audiovisual sector.
SETT has managed the Spain Audiovisual Hub Fund, an instrument established under Spain’s Recovery Plan and financed through the European Union’s Next Generation funds.Through the Spain Audiovisual Hub Plan, SETT provides financing and equity or quasi-equity investments, either directly to companies in the sector or through financial intermediaries active in the audiovisual industry. The objective has been to attract private investment and improve access to finance for projects related to films, television, animation, multimedia and interactive content, among others. Priority has been given to high-impact projects focused on creating audiovisual content and intellectual property rights while ensuring that those rights remain with the production companies.And the rationale of a sovereign venture capital fund’s co-investment model?Ponce: It is based on public-private collaboration to launch transformative initiatives that, because of their innovative nature, involve additional risks that make it difficult to attract purely private funding.
Only highly liquid, large-scale markets with a long-established audiovisual industry are able to mobilize sufficient capital to finance major new productions or transformative industry initiatives.SETT’s Spain AVS Hub fund could draw down up to €1.5 billion ($1.75 billion) from NextGeneration E.U. funding. According to María Gonzalez Veracruz, investments made are just under €250 million. Her explanation is that you simply ran out of time.
Could you comment?Ponce: Indeed, European funds have been fundamental for Spain, and the Recovery Plan has played a key role in driving major structural reforms and stimulating economic growth. However, it is also true that these funds came with specific requirements, including strict implementation deadlines, which made optimal execution more challenging.For the audiovisual sector, the possibility of co-investing alongside a public entity represented a major innovation. Time therefore became a critical factor, as market participants first needed to understand the role and implications of partnering with a public investor that shared both risks and returns.The next challenge is to ensure that these investments continue to thrive, identify new opportunities, and maintain confidence in the talent and ambition of Spanish audiovisual companies, which now benefit from SETT’s backing.SETT, however, is not over, I believe.
Obviously it has to exercise governance over investment accords now struck. I believe as well that there are plans to launch a new program España Crece, with a €13.3 billion ($15.6 billion) budget, held by ICO, but whose investments will be handled in part by SETT, if I understand correctly. Could you comment?Ponce: The audiovisual sector will remain one of SETT’s strategic areas of activity and will continue under new fund “España Crece”.
We have begun discussions with ICO to define the procedures and framework for collaboration between the two institutions, ensuring the continuation of co-investment in strategic technologies and sectors.SETT has represented a significant shift in the way public investment in strategic industries is conceived. Through SETT, the State acts as a catalyst and partner in the most innovative areas of the economy, with the objective of positioning Spain at the forefront of transformative industries. That is why we invested in the audiovisual sector and why we will continue to do so.Its ability to generate industrial activity, employment and broad economic impact makes it a strategic sector that will continue to enjoy our support.Could you illustrate the rationale of SETT’s co-investment model in one or two of the investments made and the obvious benefits it could bring to the companies Spain’s film-TV industry.Coronado: The SETT model has been built on three pillars.
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