If your attention span is 11 digits, you might be interested to know that the combined enterprise value (EV) of Spanish startups exceeded €100 billion in 2023, according to Dealroom’s latest report on the Spanish tech ecosystem. As we will see, venture capital investment in Spanish startups also held up quite well, with €2.2 billion raised in around 850 funding rounds.
Spain’s venture capital account was lower last year than in 2021 and 2022. this is not surprising as these years were extreme. Unlike other places, however, the country has not fallen below pre-pandemic levels of activity. In 2019, for reference, Spanish startups had collectively raised 1.9 billion euros in venture capital.
But first, there are several ways to check out Spain’s 11-figure EV startup. On the one hand, it puts Spain ahead of Norway, Italy or Portugal. On the other hand, with combined value amounting to 191 billion dollars, Cambridge’s tech ecosystem alone is worth nearly twice as much as Spain’s. (With $1 worth €0.92 today, forgive us for skipping the conversions.)
Much could be said about whether Spain is doing enough to support entrepreneurship — but for today, let’s stick to facts and figures.
Adding time as a factor, France reached €100 billion in combined EV startups six years ago and Germany nine years ago. But the value of Spanish technology is also one of the fastest growing in Europe, Dealroom noted in a slide. Give them more time and maybe some Spanish startups will become decorators and more.
Here is the funnel as per the report:
With a total of €2.2 billion in venture capital, the 2023 results moved the needle in the right direction, but mostly for the top of the funnel. Early-stage investment volume — pre-seed, seed and Series A — was at an all-time high last year, and the Series B and Series C stages remained strong. However, late-stage activity has been “quiet,” per Dealroom, with only two major rounds (in veteran data management platform Denodo, which has long since relocated to the US; and event startup Fever.)
The late-stage slowdown is not unique to Spain but, as elsewhere, could be worrying. The startup activity isn’t just a funnel: it’s also supposed to be a cycle.
For example, high-profile scale-ups often turn into founding factories. in Spain, it happened with Fever, but also Cabify, job&talent, Glovo and wallbox. But without liquidity events, it becomes harder for ex-employees to become angels or start new companies.
This is also a necessity on the VC side, with exits providing liquidity that can be reinvested in early stage deals. Without major M&A and IPOs, there is always a risk that funds will run out of capital to reinvest.
However, Spanish VCs do not seem to be worried. time will take its toll, they suggest. Jaime Novoa, a partner at Kfund, commented in the report that he and his colleagues are “very confident that several companies that are being funded now will become scaleups in the next five to ten years.” He cited as a positive signal how early-stage activity “remains very healthy.”
Not only is the early stage quite active, but the groups receiving funding are also in line with what Europe might want to see more of. Most of 2023 VC funding in Spanish startups went to climate tech, followed by biotech and clean energy. It’s too early to tell how many of them could become centaurs, but it will certainly be worth watching.
