Spain represents a unique case in the European tech scaleup ecosystem, according to the latest “Tech Scaleup Spain” Report produced by Mind the Bridge with the support of ACCIONA and Crunchbase and unveiled this morning at the Opening of Mind the Bridge Scaleup Summit Barcelona. Two are the main reasons: Spain is the only European country with two main scaleup hotspots of almost comparable size – Barcelona and Madrid;  the capital city is not the main tech hotspot.

“Nowadays the New Economy is concentrated in one hotspot per country, typically the capital city that in most cases aggregate up to 70% of the innovation economy – commented Alberto Onetti, Chairman of Mind the Bridge – Data would suggest that having two hotspots is not paying off in a world where innovation activities tend to be brutally concentrated. Nevertheless, a need for a more sustainable, distributed geographical economic development and – last but not least – post Covid trends of work remotization may hint at radically changing future scenarios.”

Let’s see why.

The two “tech horses”: Facts and figures

As of December 2021 Spain hosts a total of 693 Scaleups: 1.5 scaleups for every 100K inhabitants, just below the European average (1.76). The gap with France (3) and the UK (5.5) currently is too wide to be bridged but Spain outperforms all other Southern European countries. These scaleups raised $13.2B overall, 0.67% of the country’s GDP, less than the European average of 0.98% but, still, 3 times higher than Italy. In addition, the country hosts 19 “scalers” (i.e. scaleups that raised more than $100M since inception) and the only “super scaler” in the Southern European region, Glovo ($1.2B raised).

In this frame, Barcelona hosts 306 tech scaleups that raised $6.7B since inception (respectively 44% and 50% of the country’s totals); Madrid’s hub, the country’s capital city, is approximately 20% smaller, hosting 234 scaleups (34% of the country’s total) that raised $5.1B (approximately 39% of the country’s total).

2014 was the first “leap year” for Barcelona, highly driven by the large IPO of eDreams- Odigeo ($0.5B), and between 2015 and 2018 this ecosystem started to speed up its growth, reaching an average of approximately 27 new scaleups and $0.5B raised per year. Madrid reached these levels only in 2018, showing a 3 year gap.

There’s indeed “scaleup life” beyond the two cities, despite the fact that they host the vast majority (78%) of Spanish scaleups together. With 45 scaleups and $0.5B raised, Valencia is the third largest scaleup hotspot in Spain, followed by Bilbao (11 scaleups, $0.2B raised), Alicante and Malaga (8 and $0.1B, each), San Sebastian and Seville (7 and ~$25M each), Palma De Maiorca and Murcia (5 scaleups each), the last one hosting the cleantech giant Soltec that raised $176M raised since inception.

2021 – A two winners exploit

2021 might have been another turning point for Spanish tech: 139 new scaleups (a 50% increase from the previous 3-year average) and $5B in new capital raised, more than the previous four years combined. This year tracked a record for the two city hubs as well, both in terms of yearly new scaleups – more than 50 – and capital raised – above $2B. A few large deals impacted both the ecosystems performance this year: in Madrid, it is worth mentioning Jobandtalent ($0.7B raised), Idealista ($0.5B), Devo ($0.25B), and Copado ($0.2B); in Barcelona, the study recorded Glovo ($0.65B), Wallapop ($0.2B), Travelperk and Userzoom ($0.1B each). Not considering these outliers, the second still performs slightly better than the first, with approximately $1.1B in capital raised versus $0.8B.

Barcelona/Madrid vs Europe

Barcelona stands in 5th place on MTB’s Index of European tech scaleup city hubs, right after London (2483 scaleups, $78,5B raised), Paris (1330, $33.8B), Berlin (676, $34.5B) and Stockholm (576, $30B). Madrid – with 234 scaleups – closes the top ten of scaleup city hubs, with figures comparable to the ones of the Nordic capitals – such as Helsinki (264 scaleups, $4.9B raised) and Copenhagen (268, $9.3B) – and so-called “2nd-tier” hubs (e.g. Munich, 240 scaleups, $10.7B raised).

In terms of funding, both hubs appear to be lagging behind: scaleups in the top three Continental Europe hubs raised between 4.5 and 5.2 more capital than their Barcelona counterparts, and about 6 times more than those of Madrid. Other cities, less densely populated in terms of scaleups, still attract significantly more capital than Barcelona and Madrid, as in the case of Amsterdam ($10.9B), Munich ($10.7B), and Copenhagen ($9.3B).

In terms of numbers, Barcelona is slightly below the European average in terms of scaleup density (5.5 vs 8.0 scaleups for every 100K inhabitants), while it is aligned with regards to capital invested (around  3% of the city’s GDP). On the other hand Madrid, with a density ratio of 3.5 and an investing ratio of 1.7%, is positioned in the bottom-left quadrant of the matrix where cities with both below-average figures find their places. 

Based on the most recent investment trend, it is likely that both Spanish hotspots will keep improving”, ended Alberto Onetti. “The new economy is definitively the only possible driver for European growth. That said, too much concentration is neither desired nor sustainable. Time will tell whether the Spanish multi-polar approach might become a model for a more sustainable innovation ecosystem in Europe.”