Visual effects giant DNEG has acquired Canary Island-based animation studio Anima Kitchen, which is rapidly gaining popularity in the Canary Islands.
The transaction is supported by the Spanish state-owned Société de Transformation Technologique (SETT), a sovereign wealth fund that invested €24.9 million ($28.8 million) in Anima Kitchent. The joint investment, which will result in both companies becoming shareholders in Anima Kitchent, will be channeled through ReDefine Originals, DNEG's animation studio and creative incubator.
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Founded in 2017 in Las Palmas de Gran Canaria in the Canary Islands and led by CEO Angel Molinero and Operations Manager Ariana Villalobos, Anima Kitchent has grown from a staff of twelve to 170 thanks to popular preschool shows like Cleo y Cookin, Lea y Pop, and Cookin for Warner Bros. Discovery. The company is also known for using YouTube, where it has over 67 million subscribers, to launch and strengthen its intellectual property.
The aim of the DNEG and SETT investment is to take Anima Kitchent to the next level, creating 275 new jobs, «engaged in the development and production of original, high-quality projects that create long-term value through their intellectual property,» stated the Spanish Ministry of Digital Transformation and Public Administration.
SETT's investment is part of the second phase of Spain's €1.7 billion ($2.0 billion) audiovisual hub development plan, part of the European Union's Recovery, Transformation and Resilience Plan.
The new company, Anima Kitchent, will continue to benefit from the Canary Islands' tax incentives of 54%-45% on film and television production expenses, with a cap of €36 million ($41.8 million) per feature film and €18 million ($20.9 million) per TV series episode for both animation and visual effects.
As an outlying part of the European Union, the Canary Islands also offer a special zone corporate income tax (ZEC) of 4% and VAT of 7%, compared to 25% and 21% in mainland Spain.
«"The Canary Islands have a rich climate, gastronomy and picturesque landscapes, tourism and trade are fundamental, but we need to diversify their economy, and here the Spanish government is clearly betting on the audiovisual sector, especially in the Canary Islands," said Angel Víctor Torres Pérez, Spain's Minister of Territorial Policy.
«"The real advantage lies in the combination: strong intellectual property and high-quality production, coupled with data analysis that tracks audience trends in real time. Fast and high-quality production is precisely what allows these projects to penetrate new markets," said Pablo Hernandez, executive president of ZEC, about Anima Kitchent.
Anima Kitchent's new deal also marks a major step in the rapid growth of the Canary Islands' animation industry, which has expanded from a single production company in 2018 to more than 30 studios.
These include Fortiche's Canary Islands division, which produced Arcane; Atlantis Animation, the Sony-Disney partner on Leo and the Giants; Tomavision, which animated Warner Bros.' Space Jam: A New Legacy and Jolly Little Batman (Warner Bros./Amazon Prime); 3 Doubles Producciones, a prolific feature film studio; and Tinglado Films, producer of the Oscar-nominated Black Butterflies.
Finnish company Gigglebug, producer of the short films "101 Dalmatians," has opened an office in the Canary Islands. Now, Surfing Giant, creators of the Disney animated film "Hey, AJ!"—from Jeff "Swampy" Marsh (Phineas and Ferb), Michael Hodges, and Alcon Entertainment COO Scott Parish—is opening a studio in the Canary Islands.
«"Combined with previous moves—specifically, the acquisition of Studio 100 Media and Viva Pictures' stakes in 3Doubles—Anima's investment demonstrates that the Canary Islands have become a reliable and sustainable alternative for global animation: essentially a safe haven, shielding them from the turmoil affecting other markets," said Hernandez. "Local talent, stable regulations, and competitive tax incentives allow companies here to adapt more quickly to changing conditions.".
The deal, developed jointly with SETT, was negotiated by DNEG directly with Anima Kitchent. It followed more than four years of negotiations with ZEC and partners, including Proexca–Gobierno de Canarias and the island cabildos. "Our long-term work allowed us to have a deep understanding of the islands' potential when this opportunity arose," said Hernández.
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