Valencia leads the ‘top 100‘ of the best cities in the world for entrepreneurship. With a spectacular growth of 800% in just three years and where the Valencian ecosystem is currently valued at 3.75 trillion euros, the city climbs 22 positions in the global index of entrepreneurial cities to position 122, on the verge of the symbolic top hundred hubs in technology entrepreneurship and innovation, according to Startup Genome data.
The boom in the Valencia startup ecosystem is, in turn, responsible for much of the success achieved by Spain in the ‘State of European Tech 2023‘, a report compiled by the prestigious investment fund Atomico. Spain ranks seventh in terms of capital invested in startups in 2023, and it is the third most optimistic about the future of innovation and entrepreneurship in Europe.
Regarding investment, if the Valencia innovative and technological hub took off in 2023, this newly started 2024 has not fallen behind, celebrating funding rounds for Bit2Me (14 million), Internxt (3 million), or Depasify (2 million). Valencia aims to surpass its impressive start from last year, where it attracted 30 million euros in startup investment in the first semester alone, marking a 44.6% increase compared to the setbacks of 48% experienced by Barcelona and Madrid.
Recently, the growth data from the Valencian Region Startup Observatory by Startup Valencia were also released, showing a 16% increase in the number of emerging companies compared to 2022, totaling 1,314 companies, and a 14% increase in ecosystem entities, reaching 1,677.
Data and strengths of Valencia as an entrepreneurial ecosystem
The Startup Genome study, which gathers global data, includes a section on Valencia within the European segment of its report, as can be seen in this image where Valencia is featured with its own access from the report’s cover to its specific profile.
Once inside, data and feedback are gathered that provide a good indication of the strengths of the Valencia startup ecosystem, among which the following stand out:
Investment in early-stage startups: Valencia receives a notable score (7) based on the number of seed rounds and Series A rounds, ranging from 1 (lowest) to 10 (highest).
Strong investment in Series A rounds: Valencia’s startup ecosystem, with an increasing representation of solid scale-ups, sees above-average investment in Series A rounds: $6.16M (Valencia) vs $6M (Average).
Affordable talent: The challenging balance between talent acquisition and retention without skyrocketing structural costs is one of the main headaches for many startups, especially those in the expansion phase that have already achieved market fit and are looking to scale. In this regard, Valencia is a highly attractive ecosystem for companies due to its abundant pool of technical talent.
Focus on AI, eHealth, and Gaming: Within the subsections, the mentioned report highlights these three verticals in which Valencia stands out, particularly. In the case of AI, it focuses on the high number of startups operating in Big Data and Analytics. Indeed, AI was one of the main themes of the last edition of VDS and also a recent focus on this blog with a compilation of predictions for 2024. Regarding Health and Science, it emphasizes public-private collaboration and the research network with entities such as FISABIO, INCLIVA, or Bioval, among others. Finally, it highlights the creative power of Valencian game studios and qualifies our ecosystem as one of the main Gaming Hubs in Europe.
Furthermore, among the reasons highlighted by the study for undertaking entrepreneurial endeavors in Valencia are the close public-private collaboration (one of the hallmarks that have characterized the Valencian ecosystem since its inception), an open and inclusive entrepreneurial community, and the aforementioned access to technical talent.
How Europe and Spain are faring according to the ‘State of European Tech 2023’
In the case of the report prepared by Atomico, the national startup ecosystem benefits from the success of local ecosystems (especially in Valencia) to drive its growth.
In general, it is highlighted that Europe emerges strengthened at the continental level after a widespread period of investment cuts. Thus, the overall value of the European startup economy has surpassed the three trillion-dollar mark, correcting recent losses and demonstrating its resilience. “We would say the worst is over,” predict those at Atomico. As a fundamental fact, Europe now creates more startups than the United States, a significant milestone considering that the lack of entrepreneurial initiative in our culture is often cited in comparison to Americans. Another barrier broken. Moreover, in the balance of talent import and export, Europe also tilts the scales in its favor by hosting more North American entrepreneurs than Europeans who decide to emigrate there to start their ventures.
Another notable aspect in the Europe vs. USA comparison is that the Old Continent has more companies linked to Artificial Intelligence (108,000 vs. 87,000).
As for Spain, our country has been one of the most active in investment during a period with fewer and smaller rounds due to the rise in interest rates, which is a clear sign of the strength and expansive cycle of the national startup ecosystem. This is also reflected in the morale of the troops, the third most optimistic about the future alongside Poland and neighboring Portugal.
Atomico adds that, despite the positive data, “Spain still has significant growth potential,” so it doesn’t seem to be reaching its limit in this regard.
Given all these data and comments extracted from the mentioned reports, Valencia’s roadmap is reinforced in its plan to consolidate itself as an attractive region for innovative and entrepreneurial activity.
On one hand, Valencia is already one of the top choices for foreign talent seeking a high quality of life without sacrificing professional opportunities, often facilitated by access to capital, an active community, favorable legislation, and connectivity with existing local talent. On the other hand, many of the Valencian startups created in recent years operate in sectors that are currently the most attractive for investment and will lead the major advancements of tomorrow, especially in the case of Artificial Intelligence, but also in eHealth or Sustainability.
Undoubtedly, and as recently expressed by Juan Luis Hortelano, president of Startup Valencia, at the last edition of the VLC Startup Awards, it is thanks “to all the agents rowing in the same direction” that are achieving the goal of positioning the region globally, attracting – and repatriating – talent, investment, and boosting the economy.
