The Startup Ecosystem of Spain

The Spanish startup ecosystem is younger than other European countries and offers entrepreneurs a more affordable cost of living, in addition to an abundance of sunny weather which is great for attracting remote talent.
Spain is blessed with two strong ecosystems, Barcelona and Madrid. While these two cities are the backbone of the Spanish startup scene, a lot of innovation and talent has come out of Valencia and other younger Spanish startup ecosystems. Barcelona has given birth to some of Spain’s most notable companies, and unicorns such as Glovo, Wallbox, and Letgo have had successful exits. In 2022, Factorial and TravelPerk joined the unicorn list, showcasing the strength of the ecosystem. These global success stories could be what the ecosystem needs in order to prevent brain drain and stimulate its most ambitious talent to produce even more innovation.
Ironically, long-term high unemployment rates in Spain have had positive effects on the Spanish startup ecosystem, as the difficulty in finding high quality corporate jobs pushes more people toward entrepreneurship. This phenomenon is especially relevant in times of crisis when the social safety net is contracting. In the past year, however, unemployment rates hit a 15 year low, indicating an economic recovery in the country, the effects of which remain to be seen on the startup ecosystem.
Regulations to help attract talent have already been established, and foreign entrepreneurs can use an entrepreneur visa or Start Up visa to establish a company in Spain. Spain’s economy is known for its red tape and bureaucracy, which needs to be peeled back to allow startups to truly advance. For that reason, some of Spain’s notable startups have been headquartered in other ecosystems, and incorporation in Spain is not generally regarded as a smart move. If Spain manages to build a pro business narrative and track record, it will truly become a champion of innovation. Addressing the challenge of regulation reform, the Spanish government has launched the Spain Entrepreneurial Nation Strategy, a ten-year plan to position Spain’s brand as a country focused on innovation and entrepreneurship. The plan includes a New Startup Law, which passed the legislature in November 2022. Apart from tax reductions and incentives, the law proposes the launch of a new Digital Nomad Visa which would enable foreigners to stay and work in the country for up to 12 months.
Thanks to support organizations such as ACCIÓ, the public agency for the competitiveness of the Catalan enterprise, Catalonia has attracted record numbers in funding in recent years and has positioned itself as a notable hub in Europe. Similarly, in the Canary Islands, PROEXCA encourages companies to expand internationally and draws investment into the archipelago. The presence of global events such as MWC Barcelona and Smart City Expo World Congress has done wonders for promoting the ecosystem overseas and gathering entrepreneurs, investors, and tough leaders together every year.