Spanish Scaleup Growth won’t be stopped by Covid
The Spanish scaleup ecosystem is the result of ten years of sustained growth.
The good news coming from our annual analysis is that Covid-19 shouldn’t revert this trend. We estimate that Spain should close the year slightly below the 1 billion mark in new funding and with about 40 new scaleups. This represents an approximate 10% contraction versus 2019, while we are expecting a downturn in the 20-30% range at European level. Spain confirms to be the most performing innovation ecosystem among the Southern Europe countries.
The less good news is that the gap with the main European countries and global ecosystems still remains large. France, Germany and Sweden have a number of scaleups that is almost double the amount of that in Spain and overall financing is three to four times bigger. Not to mention the UK where numbers are seven or even nine times higher. Hence, more scaleups are needed and more companies able to become the new tech global giants, too. Spain has “only” 12 scaleups that were able to raise more than 100 million and (still) no super scalers (i.e. companies raising north of one billion), while the UK has 92 (plus 6 super scalers), Israel 87, Germany 46 and France 44.
This situation of undercapitalization Spain (and Southern Europe in general) suffers can be solved only by pouring in more capital.
- Firstly, by domestic investors that currently contribute for less than one fourth of the total capital invested. More VCs (particularly later stage funds) are needed.
- Secondly, by international investors: Spanish scaleups proved to be able to raise capital internationally. They need to continue to build up their international profile. Events, rectius platforms, such as the South Summit and Mobile World Congress, contributed a lot and should continue to do so.
- Thirdly, by stock exchanges that currently account for less than 10% of the total financing driver of Spanish scaleups.
- Finally, by corporations. Open innovation is growing in Spain. An extra push (both domestically and internationally) is needed to go beyond the current contributions in terms of investment (about 11% of rounds) and business.
As said, despite Covid-19, Scaleup Spain is alive and kicking. Time to scale.
by Alberto Onetti, Chairman, Mind the Bridge