If the number 11 is your threshold of interest, you might be interested to know that according to Dealroom's latest report on the Spanish tech ecosystem, the total enterprise value (EV) of Spanish startups is set to exceed €100 billion in 2023. As we'll see later, venture investment in Spanish startups has also been pretty robust, with €2.2 billion raised across around 850 funding rounds.
Total venture capital in Spain was lower last year than in 2021 and 2022, but that's not surprising since those years were exceptions. But unlike elsewhere, Spain hasn't fallen below pre-pandemic activity levels. For reference, in 2019, Spanish startups raised a total of €1.9 billion in venture capital.
But first, there are several ways of looking at the 11-digit EV of Spanish startups. On the one hand, Spain outperforms Norway, Italy and Portugal. On the other hand, the Cambridge tech ecosystem alone, with a total value of $191 billion, is almost twice as valuable as Spain. (Currently, 1 dollar is 0.92 euros, so forgive me for skipping the conversion.)
A lot can be said about whether Spain supports entrepreneurship well or not, but today we will focus on facts and figures.
Add in the time factor: France hit 100 billion euros in startup EV six years ago, and Germany nine years ago. But Spain's tech value is also one of the fastest growing in Europe, Dealroom noted in a slide. Given more time, Spanish startups could become decacorns or bigger.
According to the report, the funnel is as follows:
Image credit: Dealroom
Total venture investment is at €2.2bn, with 2023 results shaping up to be positive, but mostly at the top of the funnel. “Early stage” (pre-seed, seed, Series A) investment hit a record high last year, with Series B and Series C stages continuing to perform well. However, later-stage activity has been “quiet,” according to DealRoom, with only two mega rounds (into Denodo, a veteran data management platform that 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 it could be of concern as it is elsewhere: startup activity should not just be a funnel, but also a circle.
For example, high-profile scaleups often turn into founder factories – in Spain, this includes Fever, Cabify, job&talent, Glovo and wallbox – but without liquidity events, it becomes harder for ex-employees to become angel investors or start new companies.
This is also necessary for the VC side, as exits provide liquidity to be reinvested in earlier stage deals. Without big M&A deals or IPOs, there is always the risk that funds will lose new investment capital.
But Spanish venture capitalists don't seem worried; they suggest time will tell. Jaime Noboa, a partner at Kfund, commented in the report that he and his colleagues are “confident that several of the companies currently funded will scale up in the next five to 10 years.” He cited early-stage activity “remaining very healthy” as a positive sign.
Not only is there a lot of early-stage activity, but the teams being funded are also in line with what Europe wants to see more of: Most of the VC funding for Spanish startups in 2023 will go to climate tech, followed by biotech and clean energy. It's too early to tell how many of these have the potential to become Centaurs, but they'll definitely be worth tracking.