Smaller valuations and a lack of ego helped Spain's startup scene avoid some of Europe's shocking collapse in VC funding, investors say
Spain's startup scene has evaded some of the collapse in VC funding that has rocked Europe in 2023.VCs are now keen to back rounds they may have been priced out of during a frothy 2021.
Despite this, Spain was never one of Europe's"hottest" markets, according to Pablo Pedrejón, partner at Madrid-based firm Seaya Andromeda. The UK, France, Germany, Switzerland, and the Netherlands all regularly beat Spain to fresh venture capital investment. Panelists at 4YFN: Dalia Silberstein, Esade Center for Social Impact; Pedro Arribas Gridilla, investor at Seaya; Juliette Simonin, cofounder and COO of CrowdFarming; and Margarita Albors, founder of Social Nest Foundation."Smaller valuations and small rounds are only a reflection of a cheaper market and one that was less frothy for the last couple of years. I think it's healthy because it means businesses build sustainably," he said.
. Growth funding in Spain collapsed 57.5% to $779 million in 2022, per PitchBook. There are"basically no growth funds in Spain," K Fund's Bray added. His firm is trying to bridge that gap and reached first close on its growth fund, Leadwind, last year."There have been very few pre-IPO rounds in Spain," Seaya's Pedrejón added. But those rounds that did take place, such as Glovo and Wallbox, were successful and injected liquidity back into the ecosystem, he said.
For Seaya's Pedrejón, investors are more likely to double down on and support their existing portfolio companies."This has been an upward trend globally in recent years, and more recently, also in Spain," he said.As well as the birth of local growth funds, investors see corporations playing a role in closing the funding gap. Corporate interest in Spain's startup ecosystem has crept up in recent years, with involved in 24% of its 641 deals in 2022.
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