One of the defining industry narratives at this year’s San Sebastián Festival, running from September 18 to 26, is the high-profile presentation of SETT, the strategic venture capital fund established by Spain’s Ministry for Digital Transformation. As the festival gets underway, SETT’s director general, Javier Ponce, and its audiovisual director, María Coronado, are pulling back the curtain on how Spain’s governmental investment drive is actively fueling companies across the nation. Providing a comprehensive look at the initiative’s mechanics, achievements, and future trajectory, the leadership highlights a portfolio of dynamic Spanish enterprises that are reshaping the domestic and international media landscape.
What, explained very briefly, are the objectives of SETT’s Spain Audiovisual Hub strategy?
Addressing the foundational goals of the state-backed initiative, Javier Ponce explains that SETT operates as a public investment entity designed to manage capital deployment in strategic, transformative sectors, with a heavy emphasis on the audiovisual industry. The fund acts as a public catalyst for sustainable economic growth, job creation, technological innovation, and talent retention—all of which are deemed core pillars of a thriving creative sector.
Specifically, SETT has overseen the management of the Spain Audiovisual Hub Fund, an ambitious financial instrument originally established under Spain’s broader Recovery Plan and heavily financed through the European Union’s Next Generation funds. Through this strategic hub plan, SETT provides vital financing, equity injections, and quasi-equity investments. These monetary supports are channeled either directly to prominent companies operating within the sector or indirectly via active financial intermediaries deeply entrenched in the audiovisual ecosystem.
The overarching objective has consistently been to attract sidelined private investment and drastically improve overall access to finance for a wide array of projects spanning film, television, animation, multimedia, and interactive content. In executing this strategy, priority has been firmly placed on high-impact projects that focus heavily on the creation of original audiovisual content and the retention of intellectual property rights, ensuring that ownership remains securely in the hands of the domestic production companies rather than migrating abroad.
And the rationale of a sovereign venture capital fund’s co-investment model?
Elaborating on the philosophy behind the fund’s operational structure, Ponce notes that the model is built entirely around public-private collaboration. This partnership-driven approach is essential for launching transformative initiatives that, due to their inherently innovative and experimental nature, carry elevated financial risks that typically deter purely private funding sources.
In a European context, Ponce points out, only highly liquid, large-scale markets featuring a long-established and deeply capitalized audiovisual industry are capable of independently mobilizing sufficient capital to finance major new productions or transformative industry initiatives. By stepping in as a public co-investor, SETT bridges this critical market gap, sharing the financial burden while opening doors for private backers who might otherwise hesitate.
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?
Acknowledging the complex realities of deploying massive European recovery funds, Ponce admits that while EU resources have been fundamental to driving Spain’s structural reforms and stimulating economic growth, they brought stringent regulatory requirements and strict implementation deadlines that complicated optimal execution.
For the traditional audiovisual sector, the very concept of co-investing alongside a public governmental entity represented a massive, unprecedented innovation. Consequently, time emerged as a critical bottleneck. Market participants first needed crucial breathing room to fully understand the legal and operational implications of partnering with a public investor that shared both financial risks and potential returns. Looking forward, Ponce stresses that the immediate challenge is ensuring these initial investments continue to thrive, identifying fresh market opportunities, and maintaining unwavering confidence in the talent and ambition of Spanish audiovisual companies now backed by SETT.
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?
Looking beyond the current funding cycle, Ponce confirms that the audiovisual sector will firmly remain one of SETT’s core strategic areas of activity, transitioning smoothly into a newly planned program titled "España Crece." This upcoming program features an expansive €13.3 billion ($15.6 billion) budget that will be held by the Official Credit Institute (ICO), with a portion of the investments slated to be handled directly by SETT.
Ponce reveals that discussions have already begun between SETT and ICO to formally define the operational procedures and collaborative frameworks between the two institutions. This ensures the uninterrupted continuation of strategic co-investments in vital technologies and sectors. According to Ponce, SETT has successfully represented a fundamental paradigm shift in how public investment in strategic industries is conceived. By acting as an active catalyst and equal partner in the economy’s most innovative segments, the Spanish State has positioned itself at the forefront of transformative industries, cementing its long-term commitment to the audiovisual sector’s economic and cultural impact.
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.
Detailing the mechanics of the portfolio, María Coronado explains that SETT’s model rests firmly upon three foundational pillars. First, it adopts a sweeping, industry-wide approach rather than a narrow, project-by-project focus, thereby addressing the health of the entire audiovisual business ecosystem. Second, its investment facilities are directed specifically toward the equity capital of companies or regulated investment vehicles. Third, it actively promotes public-private partnership instruments designed for the medium- and long-term horizon.
Under this strict framework, business promoters must first convince a genuinely private investor that their enterprise represents a sound and worthwhile investment opportunity. Once that private commitment is secured, SETT steps in to co-invest on a pari passu basis—meaning the public funds are deployed to support the companies under the exact same terms, conditions, and risk profiles as the private capital.
Coronado points to tangible examples of this model successfully strengthening both domestic and international private investment in Spain-based companies, while simultaneously attracting foreign businesses looking to establish operations on the Iberian Peninsula. Standout transactions include South African investments involving The Refinery and Moonlighting, which represent a combined capital mobilization of €25 million. Similarly, prominent domestic animation leaders Amuse Labs and Milo have successfully mobilized €13 million and €19 million, respectively, showcasing the tangible potency of the strategy.
My sense is that SETT investors can indeed help companies scale, create more such expertise and build infrastructure. But would you agree?
Expanding on the future needs of the market, Coronado agrees that scaling remains a primary objective, noting that the central challenge for the coming years will be the consolidation of the promotional model currently in place. She emphasizes the necessity of strengthening and diversifying support policies so that Spain can firmly establish itself as a permanent, global hub for the audiovisual industry over the long term.
This ambitious vision requires supporting every distinct segment of the industry according to its unique operational requirements. Scaling companies naturally involves ensuring the ready availability of advanced physical and digital infrastructure to accommodate medium- and large-scale productions, alongside robust technical training initiatives to foster homegrown talent. Furthermore, Coronado highlights the ongoing need to refine the national tax framework, optimize the legal and regulatory environment to maintain international competitiveness, and closely monitor the cash-flow financing needs of modern media projects.
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?
Addressing the cultural and strategic evolution within the domestic market, Coronado answers with an emphatic affirmative. The introduction of sovereign venture capital fundamentally unlocks fresh opportunities by encouraging executives and producers to think in terms of disciplined, medium- and long-term business strategies rather than chasing immediate, short-term project financing. This institutional backing empowers local companies to significantly strengthen their capital bases, rendering them vastly more ambitious, capable of robustly protecting their intellectual property, diversifying their revenue streams, expanding internationally, and bringing their creative products to market with unprecedented efficiency.
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?
Reflecting on the hard-earned lessons from the past two years of the Spain AVS Hub Phase II, Coronado notes that the primary takeaway is the absolute confirmation that SETT fulfills a clear, vital purpose for the national media economy. It has proven uniquely effective at drawing in private investment, attracting foreign enterprises, and generating localized opportunities. Moving forward into the España Crece framework, Coronado stresses the importance of affording business plans adequate time to properly mature and allowing companies the necessary runway to secure sustainable private backing.
Can you outline very briefly what the SETT event at San Sebastián Festival will consist of?
Detailing their bustling itinerary at the ongoing San Sebastián Festival, Coronado outlines a robust series of engagements designed to showcase the fund’s progress. On September 20, the Secretary of State for Digitalisation and Artificial Intelligence—operating under the Ministry for Digital Transformation and the Civil Service, which leads the Government’s Spain Audiovisual Hub Plan—hosts a major showcase event where SETT details its financial advancements and highlights upcoming projects.
Additionally, on September 22, Coronado takes part in a high-level panel discussion during a conference organized by the CAA as part of the Spanish Screenings Investment & Tech sidebar. Later that same day, SETT is set to host an exclusive roundtable bringing together international and Spanish investment funds and commercial banks specializing in the audiovisual sector. With a few additional surprises promised for disclosure before the festival’s conclusion, SETT’s presence in San Sebastián underscores the government’s unwavering dedication to anchoring Spain’s status as a premier global content powerhouse.
