Ready, SETT, Go: SETT Execs Drill Down on the Spanish Sovereign Venture Capital Fund That Will Drive Industry Conversation at San Sebastián

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. First, it adopts an industry-wide approach, rather than a project-based one, addressing the entire audiovisual business ecosystem. Second, its investment facilities are directed at the equity capital of companies or regulated investment vehicles. Third, it promotes public-private partnership instruments on a medium-long term.
Under this model, promoters must convince a genuinely private investor that their company represents a worthwhile investment opportunity. SETT co-invests alongside the private investor on a pari passu basis: public investment is intended to support companies, but always under the same terms and conditions as private capital.
This approach strengthens both domestic and international private investment in companies based in Spain, while also attracting foreign businesses that see Spain as an attractive location to establish their operations. Clear examples include the South African transactions involving The Refinery and Moonlighting, with a combined investment of €25 million, as well as Amuse Labs and Milo, two leading examples of Spain’s animation industry, which have mobilised €13 million and €19 million respectively.
My sense is that SETT investors can indeed help companies scale, create more such expertise and build infrastructure. But would you agree?
Coronado: In my view, the main challenge for the coming years is to consolidate the model we have been promoting and supporting. It is essential to continue strengthening and diversifying support policies so that Spain can establish itself as a global hub for the audiovisual industry over the long term. This means supporting every segment of the industry according to its specific needs.
Scale is undoubtedly part of the challenge, as is ensuring the availability of the infrastructure needed to accommodate medium- and large-scale productions, strengthening technical training, and fostering talent across the industry. It will also be important to continue enhancing the tax framework and the legal and regulatory environment to maintain Spain’s competitiveness, while further developing public-private investment instruments.
In addition, it will be essential to understand the cash-flow financing needs of projects to address the full range of companies’ financing requirements. Finally, the industry’s ability to adapt and diversify will remain critical, both in terms of technology and creativity, as well as business models and corporate structures.
In your view, does the introduction of sovereign venture capital in the Spanish film and TV industry encourage a change of mindset in the industry?
Coronado: Yes, absolutely. It creates new opportunities. It is essential to think in terms of medium- and long-term business strategy, rather than focusing only on immediate projects. It enables companies to strengthen their capital base, making them more ambitious, better able to protect their intellectual property, diversify, expand internationally, and bring their products to market more effectively.
What have you learnt in the two years of the Spain AVS Hub Phase II which you would like to apply in future investments by SETT under España Crece?
Coronado: The main learning here is the confirmation that SETT has a clear and necessary purpose for the industry, both in attracting private investment and foreign companies, and in creating opportunities for the local industry. It is important to allow more time for business plans to mature and for companies to secure private investment.
Can you outline very briefly what the SETT event at San Sebastián Festival will consist of?
Coronado: As you would expect, we will have a strong presence at the festival, with a wide range of activities. On Sept. 20, the Secretary of State for Digitalisation and Artificial Intelligence, through the Ministry for Digital Transformation and the Civil Service, which is leading the Government’s Spain Audiovisual Hub Plan, will host an event in which SETT will present the huge progress we have made in financing the audiovisual sector and new ongoing projects. Additionally, on 22 September, I will take part in a panel discussion at the conference organised by the CAA as part of Spanish Screenings Investment & Tech. That same day, we will also host an exclusive roundtable with investment funds and banks specialising in the audiovisual sector, bringing together both international and Spanish participants. We also have a few more surprises in store, which we will unveil throughout this very important festival for the industry.