The Spanish startup ecosystem is beginning to stand out in the European context despite the contraction in investment

The Spanish startup ecosystem showed signs of its growing maturity during 2023. Specifically, there was a noticeable presence of investors with a more professional profile and higher economic valuations of innovative companies. These are some of the conclusions from the latest report ‘The Spanish Tech Ecosystem Report‘ by Dealroom in collaboration with BBVA Spark, Kfund, Wayra, Spaincap, Endeavor, GoHub Ventures, and Enisa, which certifies that the entrepreneurial field is facing a good moment after the slump of recent years.

The 2.2 billion euros raised by Spanish startups in 764 rounds throughout 2023 placed Spain in a prominent position for attracting venture capital at the European level.  

Specifically, our country ranks 7th in terms of VC investment received, still far from the three leading markets (United Kingdom, France, and Germany), but above countries such as Norway, Denmark, and Italy, whose startups received just over half the aggregate investment of the Spanish ones. Furthermore, Spain climbs to 4th place when measuring the level of venture capital investment in early-stage projects (1.1 billion euros) and also occupies the 4th place by number of funding rounds.

However, VC investment reflects a significant drop from the peak reached in 2021, when it reached 4.2 billion euros, a phenomenon primarily attributable to the reduction in high-value rounds and not exclusive to Spain.

Investment in early stages with professional investors

The report highlights a series of encouraging signs that temper the decline in investment.

• Investment in early stages (from pre-seed to Series A) has remained on the rise despite the overall downturn. The 1.1 billion euros that projects in these phases received in 2023, accounting for 50% of the total, represent a record in the historical series.
• Larger rounds have decreased. While early-stage investment is at an all-time high, Series B and C rounds and the so-called mega-rounds (over 100 million euros) remained well below their peak in 2021. This trend is observed across Europe.
• The environment is more attractive for corporate investors. In this regard, Dealroom highlights that, for the first time, professional investment surpassed other sources of startup funding, representing 51% of the total in 2023. Of this percentage, 35% of the investment comes from venture capital, and 16% from corporate investment by large companies and financial entities such as BBVA Spark.

“Banks differentiate ourselves from venture capital (VC) in that we have a greater aversion to risk when investing, which is why we like to see an ecosystem composed of actors who have already been successful in other projects,” explained Roberto Albaladejo, head of BBVA Spark, during the report presentation.

Keys of a rapidly growing ecosystem valued at over 100 billion

The ‘Spanish Tech Ecosystem Report’ by Dealroom identifies several trends throughout 2023 that shape the current and future landscape of the Spanish startup ecosystem.

• Spanish startups are now worth more than 100 billion euros. The aggregated valuation of Spanish startups exceeded 100 billion euros for the first time in 2023, growing by 7% compared to the previous year. The Spanish ecosystem ranks in Europe just behind France and Germany, whose startups reached the 100 billion valuation milestone more than five years ago.
• Spain is the second fastest-growing startup market in Europe. Between 2019 and 2024, the Spanish startup ecosystem grew 2.7 times, only surpassed by Norway (3.5 times). “The evolution of the Spanish tech ecosystem in the last 10 years has been tremendous. The years 2021 and 2022 seem to represent an anomaly, and today, it can be said that the pre-pandemic levels have been recovered,” noted Jaime Novoa, an investor partner at Kfund, during the report presentation.
• Rise of green technology and biotechnology. Startups in the climate tech and biotechnology sectors attracted the most investment in 2023, with 404 and 223 million euros respectively. They were followed by the clean energy sector (157 million euros), aerospace technology (116 million euros), mobility (110 million euros), circular economy (106 million euros), and sustainable buildings (101 million euros).
• New hubs of attraction. Entrepreneurship in Spain is increasingly distributed throughout the country, despite Madrid and Barcelona still concentrating most of the activity. In 2023, Madrid attracted 605 million euros in startup investment, surpassing Barcelona (457 million euros). Barcelona remains the leader in per capita investment, with 276 euros per inhabitant, and cities like San Sebastián, Seville, and Valencia are emerging as important investment hubs, with 156, 102, and 57 euros per capita, respectively.
• Smaller regions gain weight. Ecosystems in Cantabria, Murcia, Castilla y León, and Asturias have grown significantly since 2019 (multiplying investment by 22, 11, 7.1, and 6.8 times, respectively, over these four years), though they still represent a modest part of the national market.
• Startups founded by women receive only 12% of VC. Since 2019, 12% of venture capital investment has been directed to Spanish startups founded by women. This indicator shows significant room for improvement, but Spain ranks relatively well in the European context. Spain holds the fifth position in investment received by women entrepreneurs, surpassed by Finland (22%), Luxembourg (18%), Italy (16%), and Norway (13%). Between 2019 and 2023, 1.6 billion euros were invested in women-founded startups in Spain.

The multiplier effect of Spanish unicorns

The emergence of new startups founded by entrepreneurs with previous successes is a key indicator of the maturity of the Spanish tech ecosystem. Spain has a total of 18 unicorns, or tech companies valued at over 1 billion dollars before going public, according to ‘The Spanish Tech Ecosystem Report’. These unicorns not only add significant value to the market but also contribute to generating a new wave of entrepreneurship and growth, within what Endeavor calls the “multiplier effect” of innovation. Founders of successful startups like Glovo, Cabify, and Job&Talent are creating new companies and attracting investment, reinforcing the virtuous cycle of entrepreneurship. The report identifies a total of 90 new startups founded by professionals who succeeded in previous ventures.

Despite ranking seventh in Europe by the number of unicorns, Spain has yet to see any of them surpass the 10-billion-dollar valuation to achieve decacorn status. The report outlines an innovation funnel highlighting 33 scaleups valued at over 100 million euros, which are close to becoming unicorns, but the two final segments of the funnel—companies valued over 10 billion and 100 billion euros, respectively—remain empty.

“Spain has a very promising funnel of startups, breakouts (companies that have surpassed the critical point and are beginning to scale), and scaleups, but it would be beneficial for everyone if one, two, or three of the larger players started to appear in those blank spaces at the end,” concluded Jaime Novoa. With the advancement in the ecosystem’s maturity and the professionalization of investment, this forecast could be fulfilled in the coming years.