The Spanish VC landscape in 2016: industry breakdown
In our previous post, we took a close look at the Spanish startup investment landscape in 2016. Spanish startups completed 172 funding rounds combining for €525 million, almost exactly the same number as in the previous year despite a moderate increase in the total number of deals (172 vs. 155).
While looking at these overall figures is intriguing, much more can be learnt by breaking down the type of companies and investors participating in such deals. Last time we looked at the Spanish cities that attracted most funding deals and volume, and this time we’ll classify them depending on the nature of the company.
More B2C deals, much bigger investment volume in the consumer space
B2C companies were responsible for 91 of the 172 investments completed in 2016, pretty much the same rate as in previous years. Since 2013, more than 50% of all investments were made in companies targeting the consumer market, mostly thanks to the prominence of e-commerce and marketplace models, as well as startups in the B2C travel space.
Looking at the B2C vs. B2B breakdown from an investment volume perspective, the landscape is much more favourable to consumer companies, which combined for €330 million in the year, the highest level since 2013, or 62% of 2016’s total capital deployed.
The significant peak seen in 2014 for B2B startups was mostly caused by Scytl’s €94 million round.
Whilst in previous years e-commerce had been surpassed by SaaS (Software as a Service) as the sector that had attracted most funding rounds in Spain (with notable examples such as Carto, Typeform, Beabloo, UserZoom, Redbooth or Force Manager), e-commerce came back on top in 2016, with 25 investment rounds. 20 SaaS startups received funding in 2016, approximately the same amount as in the previous four years. Health, travel and fintech completed the top 5.
The analysis changes significantly when measured by total investment volume. Transportation/logistics was first, mostly thanks to Cabify’s €109 million round (the largest one in the history of the Spanish tech ecosystem, virtually tied with Privalia), followed by marketplaces (Letgo, Wallapop, etc), e-commerce and jobs marketplaces (led by Jobandtalent’s $42 million round led by Atomico).
What else can we learn from the above figures?
- Fintech investments in 2016 were mostly in pre-seed or seed companies. Despite the number of deals in financial services startups not changing significantly compared to 2014 and 2015, total capital deployed in such companies decreased significantly compared to the previous year; 2015 was perhaps an outlier, with notable rounds in peerTransfer, Digital Origin and Kantox.
- The combination of Letgo and Wallapop continued to drive investments in the marketplace sector. Although the size of Wallapop’s 2016 has not been disclosed -but it has been confirmed by Vostok New Ventures-, Letgo did raise a €90 million round led by Naspers to scale in the US.
- On top of Cabify, three additional companies raised rounds bigger than €1 million in the transportation/logistics space: OnTruck, Glovo and iContainers.
- In recent times, Europe has seen an explosion in the number of companies building job marketplaces and three of the continent’s most well funded startups in the space have significant operations in Spain. Jobandtalent is based in Madrid and raised $42 million in 2016, Barcelona-based CornerJob raised at least €34 million in various funding rounds and JobToday, although based in Luxembourg, has a large presence in the Spanish market.
- Startups based in Madrid and Barcelona combined for more than 80% of all capital invested in Spain last year. As we mentioned in our previous post, the differences between both cities are much bigger on the number of deals front than in total investment volume. The graph below shows the strongest industries in both cities (in terms of number of investments).