The startup investment landscape in Spain in 2017: €784 million across 195 rounds

This is the first in a series of posts in which we’ll do an analysis of the startup investment landscape in Spain in 2017. We did the same last year in a couple of posts, but this year we’ll try to go deeper and look in different ways at the current health of the Spanish startup ecosystem, including but not limited to:

  • Top line analysis of of the amount invested in Spanish technology companies last year
  • Geography breakdown of capital invested, mostly focusing on Madrid and Cataluña
  • Investment activity from foreign VCs in Spain
  • Business model and industry analysis based on fundraising data from last year
  • Exit activity in Spain involving both VC-backed and non-VC-backed technology companies

This analysis excludes financing from public entities (ENISA, CDTI, H2020, etc) as well as the biotech and life sciences sector. This analysis only includes publicly announced investments; for example, last year at K Fund we closed 8 investments, but only 2 of those have been publicly announced by the respective companies.

Let’s get started.

The startup investment landscape in Spain in 2017

So, here are the main numbers for 2017: last year Spanish technology companies completed 195 rounds of funding, combining for more than €784 million. Both numbers represent the highest amount ever, which points to the maturation and growth of the local technology market.

Traditionally, Q2 has been the most active quarter. What changed in 2017 was a significant uptick in activity in Q1 2017.

The amount of startups that have raised funding from investors has grown linearly since 2013 (the year in which I started collecting this data), when 120 rounds were closed. In other words, this is not exponential growth like what we’ve seen in France in the past two to three years, for example.

What has grown significantly (almost +50% year-on-year) is the total amount of capital raised by Spanish technology companies. This comes as a consequence of some very large investments completed last year, specifically those from Letgo (twice), Cabify, ID Finance, Typeform, Logtrust, Fintonic and Glovo; all greater than €20 million.

When the data is broken down by investment size, what’s clearly visible is that the amount of, let’s call them pre-seed and seed deals, grew tremendously in 2017.

Almost 50% of all rounds closed last year were equal or smaller than €500,000, which I believe makes total sense given the amount of new investors (business angels and VCs) that are now quite active in the market.

What’s also interesting is the fact that Series A activity (loosely defined in this case as rounds between €1 and €10 million) has also increased significantly, with a total of 54 investments falling in that bracket, vs. 44 last year.

There were no big changes compared to previous years at the later stage, with the aforementioned 8 rounds greater than €20 million.

All of the above brings us to the next point, which is that we’re seeing a healthy balance between the total investment volume involved in early stage and late stage funding.

Investments of €20 million or more combined for 62% of all capital deployed in Spain last year, which represents a +46% increase compared to last year. However, and as visible above, this uplift has also happened while the combined value of smaller investments continues to grow at a healthy rate of +55%.

While all looks fine and dandy, let’s finish with a reminder that the Spanish startup ecosystem remains fairly small when put into (European) context.

We’ll be back soon with more: an in-depth analysis of how startup activity is spread out across Spain.