Spain is a nation of hubs. Unlike other places in Europe where the capital city monopolizes the entrepreneurial ecosystem, with at most a second city complementing it, Barcelona and Madrid have been in the top 10 of European digital entrepreneurship for years, with Valencia consolidating its status as a third national ecosystem, and Bilbao and Malaga seeing more and more achievements. Know more about the Spain startup scene.

This diversity, analyzed in different media and considered unanimously positive, replicates to a degree the evolution of the United States, the birthplace of the startup – a place where Silicon Valley, and by extension California, have played the role of lord and master for decades, but where alternative poles of innovation such as New York, Denver or more recently Miami, whose model will be analyzed at Valencia Digital Summit 2021 that Valencia hosts in December, have also gradually emerged.


The startup ecosystem in Spain. Challenges and particularities

To understand the situation in Spain, a minimal assignment of roles is necessary. Although Madrid (1,235) and Barcelona (1,197) show a similar number of startups according to the latest MWC report on the ecosystem (2019), the former is also defined by a majority presence of investment funds and by a strong corporate backing: 21 of the 35 companies listed on the Ibex are registered there. Barcelona, on the other hand, boasts a disruptive tradition that started with the 22@, a district centred on ICT since the start of this century.

Regarding the type of proposal, if Madrid is synonymous above all with B2B and Barcelona stands out in terms of B2C, then Bilbao. And by extension the Basque Country, is an area specialized in Industry 4.0 – a niche important enough to create another pole of attraction well backed by local capital and a more favourable provincial fiscal regime.

The Valencian Community is also highly worth mentioning, featuring specialized accelerators such as GoHub, Innsomnia, Social Nest or KM Zero, those in expansion such as Lanzadera or Demium, pioneers such as Draper B1 (the old Bbooster, the first accelerator in Spain) or Plug and Play (with its European backoffice established in Valencia); in addition to leading entrepreneurs with consolidated experience (Iker Marcaide, Iñaki Berenguer) and promising hopefuls (Jeff, Zeleros, Voicemod, Streamloots, Zeus, Sales Layer); alongside prestigious academic institutions (UPV, UV, EDEM, UA, UJI) and various organizations and events that serve as catalysts as Valencia Digital Summit.

Spain startup

Finally, Malaga is carving out a unique path where public-private collaborations converge (see the Malaga TechParkparadigm), recent multinational arrivals (Google and Vodafone) and several resounding triumphs (Freepik).


Factors that drive an entrepreneurial culture

Is there a magic formula for creating a winning ecosystem from scratch? The assets that score points in this increasingly global competition are well known. Infrastructures, universities, taxation, financial aid and labour legislation form a package of essentials, to which must be added intangibles such as quality of life, climate and the tolerant and dynamic character of the city at stake. Above any other factor, however, is the talent-investment double act. Michael Bloomberg has put it this way on more than one occasion: “Talent attracts capital faster than capital attracts talent.” Bottom line: where there are good ideas and even better executions, a hub is possible anywhere.

Officially, Spain can count its unicorns on the fingers of one hand: Cabify (Madrid), Glovo and Wallbox (Barcelona), Flywire (Valencia). Soon, companies such as Typeform, Jobandtalent or Wallapop may round out this list. According to The Venture City, the fund led by Laura González-Estéfani, except in Estonia and Portugal, the Spanish ratio of investment per capita / unicorns generated is unparalleled anywhere in Europe.

Despite the liquidity differential with other neighbouring countries, the funds are showing their ambition and the deals made are becoming more and more notable. So far in 2021, disbursement in Spain exceeds 2,170 million euros over 201 operations, among which Glovo (450 million), Idealista (425), Wallapop (157) and Travelperk (132) stand out. Despite this data contrasts with the summary of 2020, where the pandemic marked a downward revision of previous years (1,106 million adding national and foreign funds and 338 operations).

What is missing?

Perhaps a more decisive participation from the large Spanish corporations in terms of shaping the ecosystem, in line with the path followed by Banco Sabadell or Telefónica. Also, it should be noted that the financial sector counts four Spanish entities among the world’s top 100 but does not seem prepared to take the plunge, in the manner one might hope, in support of the new economy.

Juan Luis Hortelano, president of Startup Valencia, paints a panorama of his city which allows us to convincingly describe the milestones that any hub must reach to be included in the big leagues.

“Ten years ago the first international accelerators arrived in Valencia . This was where Plug and Play made its first European foray and where its headquarters for the old continent can still be found. This represented a remarkable turning point – it was an entity from Silicon Valley that placed Valencia on the radar of business angels and venture capital, encouraged startups in Madrid to move here and seduced digital talent.”


Indicators of an expanding entrepreneurial ecosystem

Between 2011 and 2021 the emergence has been more than evident. As previously mentioned, there is a very active group of 20 accelerators / incubators in the region. It is another of the ingredients of a virtuous circle, which, according to Hortelano, also comprises “the balance that Valencia provides between the cost of living [housing is 20-25% cheaper than in Madrid and Barcelona] and the well-being associated with the sea and the mountains and 300 days of sunshine a year”.

Maturity really comes, however, when the exit is announced – that is, the multimillion dollar sale of a startup to third parties. Here, the stories of Marcaide and Flywire (in the past Peertransfer) really stand out . “We need these cases to multiply, as in Barcelona and Madrid, where there are already second and third generations of entrepreneurs, of people who invest the profits of their first adventure in a new project – thus the ecosystem is self-sustaining. As a consequence of this progression and despite the fact that there is still work to be done, the Valencian Community currently has more than 1.000 startups”.


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Because the entrepreneurial attitude of taking risks to achieve a vision, wanting to solve problems, share learning, embrace uncertainty and pave the way for those who follow is without a doubt the differentiating element in this special recipe. The secret sauce that nobody has been able to replicate.

Spain Startups

A complex interplay of tangibles (capital, companies, infrastructure, universities) and intangibles (networking, entrepreneurial attitude, luck), complicated even further due to the impact of Covid-19 on the world economy. Some of the effects of the pandemic favour diversity: the best scenario in order to stand out is one that favours teleworking and the dilution (or partial dilution) of the office concept. In this way, the predominance of classic hubs no longer seems so clear-cut; emerging formats have an opportunity. At the same time, this democratizing phenomenon unleashes an unprecedented drive among startups’ human resources departments. Any initiative with traction gives off the magnetism necessary to tempt the best programmers and managers in the world, wherever they are.

It is at this crossroads that Hortelano’s words make sense (Mediterranean well-being versus the coldness of the north, among other elements), even if there are a few unresolved issues that the Central Government’s Startup Law will partially address. What perhaps will take more time is the transformation of a culture that still shows aversion to contingency (an indication: the Anglo-Saxon term venture capital is translated as risk capital in Spanish) and that is just waiting for more unicorns to land and more Exits to materialize, in the hopes that the entrepreneurs themselves will lead this new wave of employment and wealth.