Spanish startups raised €525 million in 2016, versus €543 million in the previous year, according to data gathered by Dealroom and Tech.eu. In other words, startup funding levels in Spain remained pretty much unchanged in comparison to 2015.
In terms of the number of deals closed, we continued to see an upward trend in the country. In 2016 there were 172 investments in Spain, a 10% year-on-year uplift. The number of deals has increased steadily for the past four years, from 120 in 2013 to 133 and 155 in 2014 and 2015, respectively.
(This analysis excludes grants, loans from public institutions such as ENISA or CDTI as well as sectors like biotech or pharma)
Breakdown of Spanish VC funding activity by investment size and location of companies
A closer look at the number of deals closed by investment size shows an interesting trend that has been taking shape over the past few years: while the number of deals of €500,000 or less have not changed significantly, the number of larger deals (those bigger than €500,000 but smaller than €1 million and those between €1 million and €5 million) have gone up notably. This points to an increasing number of companies maturing and reaching later stages of funding.
The drop from so-called ‘seed’ stage deals to ‘Series A’ investments is not much different from other ecosystems: 2016 saw 95 deals of €1 million or less, and 38 of between €1 to €5 million. Also, and as visible on the graph above, there were no big changes when it came to late stage funding activity, with only a handful of investments larger than €20 million.
A geographical breakdown of funding activity in Spain in 2016 shows that Barcelona continues to be the leading city in the country, both in terms of number of deals and total investment volume. Barcelona-based technology companies completed 97 funding rounds in 2016, compared to Madrid’s 35. Interestingly, the gap is smaller volume-wise, with Barcelona’s startups combining for €261 million versus €179 million in Madrid.
The significant spike in investment volume in ‘other’ was mostly caused by Hawker’s €50 million round.
Spain in the European context
More than €16 billion were invested in European and Israeli startups in 2016, and Spain represented less than 5% of the total amount. As the graph above shows, the gap between Europe’s larger technology hubs and Spain’s remains relatively big.
So, what does this all mean?
It’s hard to draw strong conclusions with only four years worth of data. Despite the 2% decrease in total investment volume in 2016, the fact that the number of deals continues to go up appreciably is good news for all players involved; i.e., the 2% drop could be just a bump on the road in a much stronger upward trend that will hopefully continue in the next few years.
At K Fund we are seeing an increasing number of interesting technology companies come to market. This, combined with the fact that established companies such as Typeform, Carto, Force Manager or Cabify continue to grow internationally, as well as significant exits like Privalia and Ticketbis, makes us firm believers in the future of Spanish technology companies.
While we’re optimistic about the future, it’s always good to be cautious and humble about Spain’s role in the European tech ecosystem, and the aforementioned figures show that countries like the France, UK, Sweden or Germany are still well ahead.
