Deep dive into IBV’s growth playbook, its ambition to lead service roll-ups in Spain, and lessons from serial M&A.
Disclaimer: Unless noted otherwise, views and analysis expressed here are the author’s own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.
Introduction
On Episode 3 of the Rollup of Tomorrow I sat down with Luis Reyes, the founder of IBV, or IBV.
IBV is a builder of business services roll-ups focused on Spain. Luis truly is a Swiss Army Knife type of person, with stints in Big Tech, startups, consulting, and more recently Private Equity.
I am not at all surprised that Luis – who grew up in Mexico – has gone all-in on Spanish SMBs. After all, Spain has the largest number of search funds outside of North America (source). But it does feel that IBV’s setup is more conducive to long term value creation than those of copycat search funds inspired by the success of Ariol, which we wrote about here.
About Luis and IBV
In the interview, Luis talked about:
His career path
What drew Luis to business services rollups in Spain
How Grupo Fire grew from 0 to €30M+ in revenues
IBV’s post-acquisition integration playbook
The longer term vision for IBV
If you’d like to meet Luis in person, grab your ticket to our “AI in Rollups” event on 10 September in London. Hurry: tickets are selling out fast!
From Mexico to Spain
Alex: Luis, let’s kick off by talking about your bio: your journey from Mexico to Spain, and from consultant to a rollup founder.
Luis: I grew up in a modest family of small business owners. I was the first in the family to go to college. I studied computer science. I love programming, and due to being obsessed with the studies I graduated early. At 20 I founded my first startup, diving straight into the startup craze of the late 2000s. Over 4 years, I tried everything: coding, selling. We grew to a decent size for Mexico.
Eventually, I sold my participation to my partner. Although this was a small exit, it took me through the whole process. After that, I wanted to learn how to do things properly. So I went to work at Google, mainly in sales and business development in San Francisco. Then I moved to Riot Games (which is now part of Tencent) in LA, building infrastructure all over LatAm. Since I wanted to learn more about business, I transitioned into management consulting, spending more than 7 years at McKinsey in the US. I was mainly working in post merger integration and value creation.
And, while I loved the work, the clients, the teams, I really wanted to go back to entrepreneurship. So when Bain called me to come to Spain, I told myself, one final stint in consulting before I go back to my roots. It’s 2019, I landed in Spain. From the get-go I can see the mega-mergers of the kind we worked on in the US were uncommon here. At the same time, most Private Equity firms were focused on the upper middle layer of the market.
At the same time, you have an economy that’s 65% small businesses. There are a bunch of extremely fragmented services industries that, in the US, you would see consolidated. The opportunity was too good to miss, so with a few friends from Bain, we started what is now known as Iberian Ventures, or IBV.
Why Fire Protection
Alex: These days, a lot of people talk about creating the “Shore Capital of Europe”. IBV has already built a sizable platform. It’s called Grupo Fire: a roll up of active fire protection businesses in Spain. You talked about it at our February event. Tell me, why fire protection in the first place? And what kind of business have you acquired into that platform?
Luis: We love business services because in Spain, these are very fragmented industries. On the one hand, there is the stability that comes from recurring revenue and from regulation. On the other hand, these companies are not professionalised. It is not just about the management. We can add value by improving the way routes are designed, the way technicians do the day-to-day work. There is no need to reinvent the wheel. This has been done before. In the US, in the UK, in the Nordics.
We have looked at landscaping, HVAC, fire. What drew us to fire protection? There was a unique moment in the market when Private Equity was totally absent. That means no competition for deals. We moved quickly, buying our first business in 2022. It was a small one: €1.5M in revenue and sub €500K in EBITDA.
From there we started building up the platform. So far, we bought 24 businesses with a combined €30M in revenue. The hard part comes from finding good businesses. There are 1000s of fire protection services in Spain, but many of them have high-churn customers like construction companies.