In one of the final significant decisions of Manuela Carmena’s administration, the Madrid City Council has launched its first municipal venture capital fund dedicated to investments with social and environmental impact. With a budget of 30 million euros, this fund aims to promote business initiatives that generate tangible benefits for the city in social or environmental areas.
Five Spanish management firms were selected through a public process to manage these investments. Creas Impacto, a pioneer in impact investing in Spain, will receive the largest portion of the fund, up to 10 million euros. Following is Gala Capital Desarrollo, the socially responsible arm of Gala Capital — with investments in companies such as MásMóvil, Secuoya, and Beka Finance — which will manage 8 million euros.
Additionally, the City Council has allocated 5 million euros each to Red Capital Partners, which supports startups founded or led by women, and Bolsa Social Capital Impacto, specializing in sustainable and ethical projects. Lastly, People and Planet Partners, focused on environmental initiatives and social justice, will receive up to 2 million euros.
These amounts are approximate, as the City Council will limit its participation to a maximum of 40% in each fund and will not exceed 50% of the total capital, aiming to encourage private co-investment.
The management firms have a maximum period of six months to mobilize the funds and must allocate at least an equivalent amount to companies based in Madrid. The investments must demonstrate measurable social or environmental impact and exclude the real estate and financial sectors.
This initiative fits with the growing global interest in impact investing, which combines financial returns with social benefits. With this fund, Madrid joins a trend aligned with the 2030 Agenda and Spain’s recent membership in the global impact investing club.
Other public entities also promote this type of financing, such as ICO, which launched a specific impact investment line with 50 million euros through its Fondico program, and the Diputación Foral de Bizkaia, which participates in similar funds.
Thus, Madrid becomes the first Spanish city council to create a municipal venture capital fund with a social focus, following the example of major European capitals such as Paris, which launched a 200-million-euro green fund in 2018. According to Eurosif, impact investing in Europe grew by 132% between 2011 and 2013, and 385% between 2013 and 2015, reflecting a shift in how profitability is measured by including the social value generated.
