From bull to unicorn. Why the Spanish Startup Scene is fertile ground for more $billion valuations

Updated: May 14

International VC investors have voiced their wish for Spanish founders (and their investors) to have much higher and more global ambitions, beyond Spain and LATAM countries, reaching for exits with the magical "Unicorn" status. Their wish is about to come true as Cabify's expected IPO is getting closer.

So first things first; are there actually any Startup unicorns from Spain?

Yes, Spain has two startup unicorns. Cabify (Uber competitor) and in the late 2019 the delivery service Glovo also reached the elusive Unicorn status. Quote from TechCrunch:

"The Barcelona-based startup says the latest raise has pushed its valuation past $1BN — putting it into a very exclusive Spanish unicorn club, with the likes of ride-hailing giant Cabify. (Glovo reckons it’s only the second privately held business in the country to achieve such a valuation)."

When will Spain's unicorn Cabify do its expected IPO?

In February 2019, everyone got extra excited as this newsflash showed up:

"Cabify is working with various banks to IPO on the Spanish stock market before the end of the year. The company’s last private valuation was $1.4 billion."

In September of 2019, Cabify, turning 8 years, implies to Cinco Días that they have learnt from its American competitor Uber, saying "it would be optimal to reach profitability before doing an IPO to become a publicly traded company", in their case now planned for 2020.

Cabify's Spanish president, Mariano Silveyra, said that they can show "many variables that the market values today", boasting updated numbers: 1,500 employees and about 200,000 drivers spread across 130 cities in 12 countries.

He further comments on their profitability goal that they "do not plan to expand in the coming years, as they prefer to "retain" the markets in which they already operate."

Mature founders are nurturing the eco-system

The fertile ground referred to is very much based on the available talent for building a startup dream team and on the fact that Spanish startups and their founders have matured.

A great example of how Spanish, successful, serial startup founders are contributing and nurturing the startup tech ecosystem is Klikin and its co-founder Gustavo Garcia Brusilovsky who sold 70% of the startup to Repsol in January 2018 for €12 million.

Back in 2010 he managed to sell the private online shopping club Buyvip to Amazon for €70 million. This deal is said to be one of the very foundations of the Spanish startup ecosystem.

Peter Specht, Venture Capital firm Creandum, confirms the importance of senior startup mentors as he writes about "several factors pointing to that Spain is on a great path going forward." On of them being "The rise of second-time entrepreneurs (and business angels)":

Similar to what we have seen in other ecosystems, entrepreneurs who have exited/left their first start up are now returning as founders of their second company, acting as business angels or setting up founder led VCs.

Another important yet tragic-turned-positive factor is that the economically very tough times that Spain went through fostered resilient Entrepreneurship.

The brutal reality for young, well-educated Spaniards seeking full-time employment during the long period of the crisis, forced many to look for ways of self-employment, effectively paving the way for the blossoming startup community that Spain can be proud of today.

The resilience of the Spanish entrepreneurs is backed up by OneRagtime, another international venture capitalist with office in Spain, who also writes posts about their belief in the huge potential in the startup ecosystem across Spain:

Spain’s bitter recession years have bred a new type of Spanish entrepreneur. These founders have built business models primed for global expansion and set their sights on huge markets.

Relevant education in ICT

When measuring the difficulty in finding ICT specialists among European companies overall, only 17% of Spanish companies said it is a problem, versus 46% on average in the OECD countries analysed for the report, 100 reasons to invest in Spain (July 2018).

"In terms of the availability of human resources with training and/or experience in science and technology, Spain ranks 4th in the OECD."

Furthermore, it says in the report that:"in the international rankings, 3 schools (IESE, ESADE and IE Business School) are consistently among the top in Europe and in the world in the most reputed rankings. Spain ranks 3rd in Europe and 5th in the OECD for quality of business schools according to the WEF27."

Spain’s work-life balance attracts and retains top talent

The increasing international competition forces the need for identifying more attractive factors than the obvious compensation of the salary package and the strong local ecosystem that need to be in place.

One core feature to attract and retain talent, sometimes overlooked in the comparison between the leading startup hubs, is the quality of life. According to the OECD Better Life Index, Spain gets a high placement in this regard:

"Spain’s work-life balance is one of its main attractions. Among its OECD peers, Spain’s attainable work-life balance ranks 4th."

So all in all, the future seems very bright and prosperous for the Spanish tech startup scene and this quote from OneRagtime sums it up well:

There’s no reason to believe this momentum won’t continue, and every reason to expect more big rounds, big exits and big unicorns to come.

Did you find this interesting? Do you agree? Or disagree? I so love an interesting conversation and would love to hear your thoughts. Please do leave a comment!!

Crafted by Caroline Lagergren.

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