Startup Ecosystem Of Spain

Spain's startup ecosystem is young yet vibrant. Although the country began cultivating its first tech companies over a decade ago, , it's only recently that entrepreneurship has gained significant traction, leading to the creation of companies with global aspirations. The total value of Spain's startup ecosystem now stands at €93 billion, driven by approximately 3,456 registered startups and the emergence of five homegrown unicorns: Factorial, Recover, TravelPerk, Cabify, and JobandTalent.

Introduction of Spain Startup Law in January 2023 signifies a notable shift in the government's approach to supporting and regulating startups, signaling a new era of innovation and technology-driven business ecosystems. Tailored specifically to the unique needs of startups, this legislation establishes a specialized regulatory framework aimed at addressing their distinct characteristics and challenges, particularly during their initial stages of development.

With a focus on encouraging both public and private investment in startups and addressing educational gaps within the industry, the law stands out for its emphasis on creating a favorable tax environment for emerging businesses, offering substantial benefits for entrepreneurs, employees, and investors.

These measures are designed to stimulate entrepreneurship and foster the growth of new ventures. Additionally, the law proposes the introduction of a Digital Nomad Visa, enabling foreigners to live and work in Spain for up to 12 months. Furthermore, the law innovates employee compensation by enhancing the attractiveness of stock options as a form of remuneration.

The Spain Startup Law represents a significant milestone in the nation's dedication to cultivating a robust and innovative entrepreneurial ecosystem. Through strategic enhancements to the startup ecosystem aimed at nurturing and retaining enterprises, Spain is positioning itself as a leading hub for entrepreneurship in Europe.

According to recent data from the Foreign Investment Register of the Secretary of State for Trade, foreign investment in Spain exceeded €28.21 billion in 2023. Despite global uncertainties, it is underscoring the resilience of the Spanish economy and the confidence investors place in it. The United States led in investment flows to Spain, accounting for 28.9%, followed by the United Kingdom (13.1%), Germany (10.6%), and France (9.2%).

Additionally, investments from countries like Australia, Switzerland, Canada, and Mexico have increased, reflecting the diversification of trust in Spain. In terms of sectors, the services sector attracted the majority of foreign investment (54.3%), followed by the industrial sector (42.2%), and construction (3%).

Notable subsectors include wholesale trade, telecommunications, electricity, and fuels. Spain continues to emerge as a highly attractive destination for international investors, with an annual investment volume hovering around €30 billion, a significant increase from €20 billion a decade ago in 2014.

These are the unicorn startups in Spain.

1. Factorial 

Established in 2016 by Bernat Farrero, Jordi Romero, and Pau Ramon in Barcelona, Spain, Factorial has emerged as a leading HR software provider for SMEs. Their platform offers intuitive solutions that streamline and centralize administrative tasks, providing valuable insights to facilitate smooth business operations.

With features including time management, talent management, recruitment, expenses, analytics, and document management, Factorial offers a comprehensive suite of services. Their user-friendly, all-in-one platform enables businesses to prioritize their people, allowing them to focus on what truly matters. In 2022, Factorial achieved unicorn status, driving them to continue their mission of delivering a one-stop solution for all HR needs.

2. Recover 

Established in 1947 in Alicante, Spain, Recover is a prominent materials science company specializing in the production of low-impact, high-quality recycled cotton fiber and cotton fiber blends. Their premium, environmentally friendly products are developed in collaboration with global retailers and brands, providing a sustainable solution to address fashion's environmental challenges.

As a fourth-generation, family-owned company with a 75-year history in the textile industry, Recover is committed to scaling its proprietary technology to drive lasting positive change for the environment. They actively seek partnerships with brands, retailers, and other stakeholders to collectively achieve sustainability targets within the industry.

3. TravelPerk

Established in 2015 by Avi Meir, Javier Suarez, and Ron Levin in Barcelona, Spain, TravelPerk is a rapidly growing SaaS business travel platform leading the way in the future of corporate travel. Their comprehensive platform offers travelers the freedom they desire while ensuring companies maintain the control they require.

This results in time, cost, and hassle savings for all parties involved. With industry-leading travel inventory, robust management features, 24/7 customer support, cutting-edge technology, and user-friendly design, TravelPerk is revolutionizing business travel with a seamless end-to-end solution.

4. Cabify

Established in 2011 by Adrian Merino, Francisco Montero, Juan De Antonio, Sam Lown, and Vicente Pascual in Madrid, Spain, Cabify facilitates connections between private users and companies with transportation options tailored to their needs.

With a primary goal of improving urban living, Cabify aims to alleviate traffic congestion by leveraging technology to offer safe and high-quality transport solutions.

5. Job&Talent

Established in 2009 by Felipe Navio and Juan Urdiales in Madrid, Spain, Job&Talent is a global leader in the essential work marketplace. Their platform connects exceptional individuals with top-tier companies, leveraging technology to facilitate reliable and flexible employment opportunities.

As a remote-first organization, they operate across 10 countries in Europe, the U.S., and Latin America. Job&Talent is revolutionizing temporary employment by simplifying job searches and hiring processes, utilizing the potential of technology and data to break down barriers.

Spain demonstrated greater resilience compared to its European counterparts in terms of VC investment. There has been a surge in early-stage investment, marking a record high, with funding rounds predominantly coming from Spanish investors supporting startups.

Spain presents promising opportunities for both investors and entrepreneurs, despite a few notable risks. The strategic initiatives aimed at enhancing the business environment are expected to bring significant benefits to investors, entrepreneurs, and foreign professionals looking to engage with the Spanish market. The landscape of business innovation in Spain is on the verge of undergoing a transformative change.