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Fundraising in Spain: A Market Overview, Financing Options, and Tips to Succeed

Spain has become an attractive destination for startups and SMEs looking to raise funds. The country’s entrepreneurial ecosystem has been growing rapidly in recent years, with a thriving startup scene and increasing interest from foreign investors. However, raising funds in Spain can be challenging, especially for foreign entrepreneurs who are not familiar with the market. In this article, we will provide an overview of the PE/VC fundraising landscape in Spain, the financing options available, and tips to succeed.

Spain as a Place for Fundraising – market overview

More and more startups come to Spain to fundraise. According to Invest in Spain, more than 2 billion euros were invested in startups in 2021. Some of the key players in the Spanish fundraising market include venture capital firms such as Kibo Ventures, Nauta Capital, and Seaya Ventures. Foreign investors such as SoftBank are interested in this market too. They’ve invested in several Spanish startups recently. 

There are a number of industries which are the most interesting for investing in — real estate, fintech, e-commerce, and biotech are among them. Since the country has a stable economy, attractive property prices, and favourable legal and tax systems, real estate is a good opportunity for investors. Spain’s property market has been on the rise in recent years, with the country’s housing market bouncing back quickly after the 2008 financial crisis. The average price of residential property in Spain increased by stongly since 2014 as we wrote in our Spanish real estate report: Spanish real estate prices rose by +3.3% over the last 12 months: the top 20 markets!

Also, non-residents are only required to pay income tax on rental income earned in Spain and the tax rate is relatively low in comparison to other European countries.

Financing options in Spain

For those who’re looking for investments in Spain, there are several types of financing. There are more than 70 active PE&VC funds investing from early to late-stage. One-third of them invest in real estate businesses. Let’s take a look at 5 notable funds in Spain with their AUMs:

• Seaya Ventures (€268m)
• K Fund (€250.0m)
• Samaipata (€107.0m)
• Nauta Capital (€70.0m)
• Inveready (€45.0m)

Here is the full list of other funds.

There are also a number of Spanish grants, incubators and accelerators. These organizations provide various resources and services, including mentorship, networking opportunities, and access to funding.

One of the most prominent accelerators in Spain is SeedRocket, which has supported over 100 startups in the country. The accelerator offers a four-month program for early-stage startups, providing mentorship, training, and access to investors. Another notable accelerator is Wayra, which is part of the global accelerator network run by Telefónica. Wayra provides funding, workspace, and mentorship to startups in a variety of industries, including fintech, cybersecurity, and artificial intelligence.

In addition to accelerators, there are also several incubators in Spain that support early-stage startups. For example, Demium Startups is a pre-seed incubator that provides funding, mentorship, and resources to help entrepreneurs launch their businesses.

Other incubators in Spain include:

• Conector, which specializes in digital startups,
• Tetuan Valley, which focuses on supporting tech entrepreneurs.

There are also crowdfunding/crowdlending options for startups in Spain. They’re presented by the platforms: October, Housers, Crealsa, Colectual, StockCrowd IN, Inveslar, Arboribus, Growly, Loanbook Capital. You can search for crowdfunding and crowdlending Spanish actors by clicking on the link.

Tips to succeed

You should keep in mind several factors to successfully attract investments in Spain. 

1. Have a solid business plan.

2. Know your goals, strategy and financial plan.

   This will help potential investors understand your vision and assess the potential return on investment

3. Understand the local market.

   Learn who are your competitors, and how communications work: be transparent and excited about your product but also have patience, Spanish investors appreciate it.

4. Build a relationship before asking for investments.

   Learn who are your competitors, and how communications work: be transparent and excited about your product but also have patience, Spanish investors appreciate it.

5. Take advantage of government incentives and grants.

   The Spanish government offers a range of programs and incentives to support startups and small businesses, including tax breaks, grants, and low-interest loans. By taking advantage of these opportunities, you can demonstrate to investors that you are committed to growing your business and have the support of the government.

6. Use smart search of investors.

   With the Private Equity List platform, you can search around 6000 PE&VC funds, 1600 accelerators and incubators and 23000 investor contacts using smart filters: fund country, investment ticket, industry focus and more. Start smart search right now with 50% OFF code given for HTBIS readers for 1 month of the PRO plan: PRO50

 

Don’t miss our other article on the subject: Why not start up in Spain? 

Looking for an expert in Spain? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

The post Fundraising in Spain: A Market Overview, Financing Options, and Tips to Succeed appeared first on How to buy in Spain.

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Barcelona and Madrid in the European top 6!

According to the site EU-Startups, Spain is the only country with two cities in the top 10 in Europe. Those cities are Barcelona (5°) and Madrid (6°). So starting up in Spain could be one option to consider, should you want to find a good city in Europe.

Low cost of living

The most attractive features for investors and entrepreneurs in Spain are probably the relatively low cost of living compared to other European countries.(10% in average), check

Costs are on average 10% lower than in other European countries, check our post on that.

Incubators and Accelerators

The great amount of incubators and accelerators that are established in the country, which is in a relation of less than 10 startup per incubator or accelerator.

Strong Education level

One of the main characteristics of the Spanish startup ecosystem is the great educational level of entrepreneurs and workers. If you combined that to the easy-access of international markets, it makes it so attractive that even Google opened a Campus Madrid in 2015 .

International & Venture Capital interests

During that year (2015) roughly 400 million € from Venture Capitals were invested in startups creating approximately 1.500 jobs . In addition to that, the “Instituto de Crédito Oficial” raised the FOND-ICO (fund of funds) from 1,2 to 1,5 billion €. That will help the revitalization of the risk capital sector in Spain .

Government interests

The Spanish Government has also given incentives to entrepreneurs, such is the case of 4/2013 Law that establishes a discount between 20% and 50% in the full state fee. The Public Sector represented mainly by the Centre for Industrial Technological Development (CDTI) and the National Innovation Enterprise (ENISA) also invested 118 million € in 2015, hitting the record number for the Spanish startup market of 659 million € invested (233% more than in 2013).

How to improve further?

In order to continue the path of growth, in 2015 a group of Spanish startup and non-profit published the “Spanish Startup Manifesto” . It compiles the headlines of what Spain needs in order to be a country where startups can thrive. The points of needed improvements proposed by the manifesto are:

1. Talent: Need to stop the brain drain because it has a very negative impact on the economy.
2. Capital: Need of more access to capital, more reinvestment of profits, more foreign investments and increase access to crowdfunding.
3. Regulatory Environment: Need of a stable and effective legal framework to facilitate the creation, management and closing of companies.
4. Ecosystem: Need to overcome the difficulties that prevent the materialisation of the startup potential that exists in Spain. This potential has grown significantly in the last couple of years.
5. Education: It is fundamental to drive the entrepreneurial spirit in all stages of education.
6. Culture: Need to overcome the cultural barriers that damage entrepreneurial activity.

Need a quick set up? Look at : https://www.thesurfoffice.com/

Looking for an expert in Spain? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

The post Why not starting up in a Spanish City? appeared first on How to buy in Spain.