If numbers in the billions catch your eye, you’ll be intrigued to know that the combined enterprise value (EV) of Spanish startups exceeded €100 billion in 2023, as revealed in Dealroom’s latest report on the Spanish tech ecosystem. Additionally, venture investment into Spanish startups remained robust, with €2.2 billion raised across approximately 850 rounds of funding.
Spain saw less venture capital last year compared to 2021 and 2022, but those years were anomalies. Unlike other regions, Spain has not dropped below pre-pandemic activity levels. For reference, in 2019, Spanish startups collectively raised €1.9 billion in venture capital.
There are multiple perspectives on Spain’s €100 billion startup EV. This figure places Spain ahead of countries like Norway, Italy, and Portugal. However, in comparison, Cambridge’s tech ecosystem alone has a combined value of $191 billion, nearly double Spain’s. Since $1 is approximately €0.92 today, we’ll skip conversions for simplicity.
Much could be debated about whether Spain is adequately supporting entrepreneurship, but for now, let’s focus on the facts and figures.
Considering time, France hit €100 billion in combined startup EV six years ago, and Germany did so nine years ago. However, the value of Spanish tech is among the fastest growing in Europe, as noted in a Dealroom slide. With more time, some Spanish startups might evolve into decacorns and beyond.
According to the report, here’s the funnel:
With €2.2 billion in venture investment, 2023 advanced the Spanish startup ecosystem, particularly at the top of the funnel. Investment in early-stage rounds—pre-seed, seed, and Series A—was at an all-time high, while Series B and Series C stages remained robust. However, late-stage activity was relatively quiet, with just two mega-rounds for Denodo and Fever.
The slowdown in late-stage activity is not unique to Spain and could be worrisome. Startup ecosystems are meant to be circles, not just funnels.
High-profile scaleups often become launchpads for new founders; in Spain, this has happened with Fever, Cabify, job&talent, Glovo, and Wallbox. But without liquidity events, it’s tougher for ex-employees to become angel investors or start new companies.
This is also essential for VCs, as exits provide the liquidity needed for new early-stage investments. Without significant M&As and IPOs, funds might struggle to find capital for reinvestment.
Spanish VCs aren’t overly concerned, suggesting that time will even things out. Jaime Novoa, a partner at Kfund, expressed confidence in the report, stating that several companies currently funded are likely to become scaleups in the next five to ten years. He highlighted the positive sign of sustained early-stage activity.
Not only is early-stage activity vibrant, but the funded teams are aligned with what Europe aims to see more of. Most of 2023’s VC funding in Spanish startups went to sectors like climate tech, biotech, and clean energy. It’s early to predict if any will grow into major players, but it’s certainly something to watch.
