Updated: May 3, 2022
- Spanish startup founders make every Euro count.
You know the expression for buying any type of product or service: "Fast, low-cost, high-quality, pick two!" What if Spanish tech startups actually live up to all three of these desirable factors, without always being aware of it?
I have been closely following the ongoings in Spain's startup ecosystem for more many years now and lately I have been asking myself what the unique, common denominator is when it comes to being able to attract international capital. Is there something else worth highlighting, more than "just" the access to tech talent to comparatively low labor cost?
Something clicked when chatting with an American investor who said:
"Early-stage Spanish startups tend to fundraise seed capital on an ongoing bases, rather than sourcing their needs in one go, because they believe money is scarce."
Let's compare this way of thinking with the financial behaviors of founders in the complete opposite startup hub of Silicon Valley, or with other, much more mature ecosystems, where the reality is another with a lot of money circulating and readily available from a large community of tightly connected investors, especially for Fintech, SAAS and Marketplace.
My theory here is that this belief, that venture money is scarce within the borders of Spain, adding the belief that it is difficult to get the attention of international investors, has made Spanish founders a lot more financially strict than their counterparts in the rest of the world.
One proud investor wrote Investing in Spain’s #1 Neobank, giving praise to Bnext, a famous Spanish, Fintech for having: "Amazing KPIs and very competitive pricing vs the industry".
He further states in his blog post.
"In addition to the promising KPIs, beaten month over month, their cost of consumer acquisition was largely inferior to that of their larger competitors in Europe."
"Almost 300K customers that had costed them 15 euros to acquire in average, a fraction of what it costs to any other Bank with a real usage of at least twice a month."
The affordability factor is central
If you believe that money is very hard to come by, then you are probably more likely to take that mindset to product- and service-building as well, carefully breaking down every economic unit into smaller parts to look for cost-savings and efficiencies, coupled with a commitment to lower prices for the end-customer as well.