If your attention span is 11 digits, you is perhaps interested to know that the total enterprise value (EV) of Spanish startups exceeded €100 billion in 2023, based on a study Dealroom’s latest report on the Spanish tech ecosystem. As we are going to see, enterprise investment in Spanish startups has also remained quite strong, reaching €2.2 billion raised in around 850 funding rounds.
Last 12 months, the level of enterprise capital in Spain was lower than in 2021 and 2022; this is not a surprise as these years were outliers. However, unlike elsewhere, the country has not fallen below pre-pandemic activity levels. For comparison, in 2019, Spanish startups raised a total of €1.9 billion in enterprise capital.
But first, there are a few ways to look at the Spanish startup’s 11-digit EV result. On the one hand, it puts Spain ahead of Norway, Italy and Portugal. On the other hand, about the total value value USD 191 billion, Cambridge’s tech ecosystem alone is almost twice that of Spain’s. (Today 1 USD is value 0.92 EUR, so forgive us for skipping the conversion.)
There’s a lot to be said about whether Spain is doing enough to support entrepreneurship – but for today, let’s stick with the facts and figures.
Adding time, France reached €100 billion in its combined EV startup six years ago and Germany nine years ago. But the value of Spanish technology is also among the fastest growing in Europe, as Dealroom noted in the slide. Give them more time and perhaps some Spanish start-ups will turn into decacorns and more.
Here is the funnel based on the report:
With a total enterprise investment volume of €2.2 billion, the 2023 results moved the needle in the right direction, but mainly up the funnel. “Early-stage” investment volumes – pre-sowing, seeding and Series A – were at an all-time high last 12 months, while Series B and Series C stages remained high. However, based on Dealroom, late-stage activity has been “quiet” with only two mega rounds (to veteran data management platform Denodo, which has long since relocated to the US, and data-driven events startup Fever).
The slowdown in late-stage activity is not unique to Spain but, as elsewhere, could also be a cause for concern. Startup activity is not only a funnel: it also has to be a circle.
For example, high-profile scale-up firms often turn into founder factories; in Spain this was the case with Fever, but also with Cabify, job&talent, Glovo and wallbox. However, without liquidity events, it would be tougher for former employees to turn into angels or start recent firms.
This is also vital on the VC side, as exits provide liquidity that might be injected back into early-stage deals. Without large mergers and acquisitions and IPOs, there is all the time a risk that funds will likely be deprived of capital to have the option to take a position anew.
Spanish VCs don’t seem fearful though; 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 funded today will become scaleups in the next five to ten years.” He cited the undeniable fact that early-stage activity “remains very healthy” as a positive sign.
Not only is the early stage quite lively, but the teams that are receiving funding are in line with what Europe might wish to see more of. The majority of VC funding given to Spanish startups in 2023 was allocated to climate technologies, followed by biotechnology and clean energy. It’s too early to inform how many of them may turn into centaurs, but they’re actually value tracking down.