Spain’s startup ecosystem: 9 investors on remote work, green shoots and 2020 trends

As reported in the first half of our Spain-focused VC survey, the nation’s startup ecosystem continues to grow and is keeping pace with ecosystems in more developed European countries such as U.K., France, Sweden and Germany.

While main hubs Madrid and Barcelona bump heads politically, tech ecosystems in each city have been developing with local support. According to this regional investor database from StartupRiders, Spain is home to 62 angels, 84 seed funds and 19 Series A and beyond institutional funds.

As the capital and financial center, Madrid enjoys proximity to political power and multinational companies, which is likely why it’s home to a larger proportion of fintech startups. According to Dealroom, between 2015 and 2019, Madrid’s emerging companies raised €1.5 billion. In recent years, its Arganzuela district has become known as a startup hub, but Barcelona’s Districte de la innovació is also home to a growing number of established and upcoming technology companies.

May of 2020 saw a resumption of VC activity with €70.89 million invested in startups. Wallabox, the Barcelona-based electric charger company, closed the second part of €12 million from a Series A investment. Also in May, Belvo raised €9.09 million, Accure Therapeutics €7.6 million and Cubiq Foods €4 million.

Notable companies and data points:

  • Voovio Technologies — raised €15 million from Moira Capital.
  • MOVO — €13 million from Delivery Hero, Seaya Ventures and others.
  • Lana — $12.5 million from Base10, Cathay Innovation and other investors.
  • ProntoPiso — €1.6 million from existing shareholders.
  • Colvin — raised €14 million.
  • U.S./Spanish insurtech startup CoverWallet was sold to AON for $330 million.
  • MediQuo — raised €4 million.
  • Factorial — raised a €15 million in a Series A round led by CRV.
  • Holded — €6 million Series A round in 2019 led by Lakestar.

Here are the investors who shared their thoughts with us for the conclusion of our Spain VC survey:

Lourdes Álvarez de Toledo, partner, JME Ventures

What trends are you most excited about investing in, generally?
SaaS. B2B.

What’s your latest, most exciting investment?
Kymatio.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Subscription B2C app for managing kids from 0 to 18 years.

What are you looking for in your next investment, in general?
Scalability,

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Too much competition: travel. Interesting areas: quantum computing.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50% in Spain.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Industries: cybersecurity. Companies: Lingokids, Devo, Genially, Glovo.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Spain has no Series B investors, so there are many opportunities for foreign Series B funds.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
At least in Spain, I think remote work will be only temporary. If you are freelance it is still important to work near the main cities.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19?
Retail, fashion, travel.

What is your advice to startups in your portfolio right now?
Don’t take debt if it is not extremely necessary, try to be cash flow positive — although you have to sacrifice faster growth.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes! In Genially: awesome growth.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Schools opening again (four kids already).

Any other thoughts you want to share with TechCrunch readers?
Spain will be very harmed the next year, and so will the startup ecosystem.

Javier González-Soria y Moreno de la Santa, managing partner, Top Seeds Lab

What trends are you most excited about investing in, generally?
Travel tech

What’s your latest, most exciting investment?
Doinn.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Nope. Last-mile distribution.

What are you looking for in your next investment, in general?
Solid technology and experienced team.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
B2C in most industries.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Spain, 60%. Portugal, 20%. Latin America, 20%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
I am excited with our portfolio.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Obviously Madrid is the main location in Spain but it is far behind London, Paris or Berlin.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
We don’t believe in the concept of a startup hub linked physically to a city. We have invested in startups based in Madrid, Valencia, Murcia, Sevilla, Lisboa and Lima. The concentration is on the side of the VCs, which tend to locate in large cities.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? 
Travel on its B2C side, especially cruises, meetings and events.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We provide support to help cruise these difficult quarters to those companies that have the capability to sensibly reduce their burn rate.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, in companies like STAYmyway, CheKin, etc., focused on avoiding interactions with the traveller.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
No hope in travel. Until we have the vaccine there is no real recuperation.

Joaquín Sanz Berrioategortua, partner, Kereon Partners

What trends are you most excited about investing in, generally?

Electric vehicles.

What’s your latest, most exciting investment?

Big data for medical treatments.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Industrial.

What are you looking for in your next investment, in general?
Talent and growth.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
AI.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More local.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
QualityFry. World Mastery.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Great opportunities in a fast-moving ecosystem.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? 
Travel agencies. Hotels.

What is your advice to startups in your portfolio right now?
Keep cash safe.

Samuel Gil, partner, JME Ventures

What trends are you most excited about investing in, generally?
Consumer subscription businesses and bottom-up SaaS.

What’s your latest, most exciting investment?
Emjoy, a sexual well-being app for women.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Digital health, B2B marketplaces and fintech infrastructure.

What are you looking for in your next investment, in general?
We invest from pre-seed to Series A, sector agnostic (software heavy), focused almost exclusively on Spain. Nothing really new here: great founders, differentiated products, big markets, scalable business models, building moats over time.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Consumer fintech, DTC brands, dark kitchens.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
We invest over 70% of our funds in Spain.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Jobandtalent (Juan Urdiales), Lingokids (Cristobal Viedma), Genially (Juan Rubio), Atani (Haydée Barroso), Smart Protection (Javier Perea), IriusRisk (Stephen de Vries), Emjoy (Andrea Oliver), Hearts Radiant (Juan Cartagena).

How should investors in other cities think about the overall investment climate and opportunities in your city?
The ecosystem is still young but very vibrant. Technical and managerial talent is abundant and less expensive than in other European cities. Quality of life is top. Some success stories are being built, which will develop further the ecosystem.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
It could be. We have already made some investments in companies outside the major hubs such as Declarando (Castellón), IriusRisk (Huesca), PLD Space (Elche), Genially (Córdoba), Biome Makers (Valladolid).

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
To state the obvious, the travel sector. But there are always opportunities if you look for them. For instance, we have invested  in a company (CheKin) that automates (eliminating all human contact) the check-in process for rental/vacation apartments and has been adopted by platforms such as Airbnb.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
It is difficult to price risk for companies in sectors totally affected by COVID, such as travel. Biggest worries: Ability to close B2B deals over Zoom, demand crisis for consumer products due to weak economy, difficulty to fundraise. Advice: Be very cautious with cash, but don’t stop building a business set up for long-term success.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
For sure. There are sectors (e.g., edtech, e-commerce) that have been underdogs for years having the best time ever.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
The ease with which founders have adapted to the new situation. WFH, revisited assumptions for business plans, new plans for financing … they make the impossible look easy.

Any other thoughts you want to share with TechCrunch readers?
We truly believe that Silicon Valley is more a mindset than a place and that’s what we have been trying to bring to Spain for the last 10 years. A founder-first, upside-maximization strategy is the key to win. We strongly believe in Spain becoming a major tech hub in the future due to its advantages in terms of talent, lifestyle and cost and the increased interest in building remote-first companies.

Josep Guitart Pardellans, associate, Sabadell Venture Capital

What trends are you most excited about investing in, generally?
B2B software, logistics, edtech, AI, ML.

What’s your latest, most exciting investment?
Fluzo and Predictiva.

What are you looking for in your next investment, in general?
Great product metrics: engagement, stickiness, retention. But also some commercial traction and a proper go-to-market strategy.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
It is always a matter of execution. Yahoo was the number one search engine until Google. But if I have to pick one, HR platforms for job posting.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 90%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
I believe that there are many great companies well-positioned to thrive: Red Points, Odilo, Fluzo, Predictiva or Exoticca. In terms of industry, Spain was quite well-positioned in travel, highly impacted by COVID, but will return in the near term.

How should investors in other cities think about the overall investment climate and opportunities in your city?
The ecosystem is getting more mature and better opportunities are arising. However, there is more liquidity in the market. Thus, fierce competition in great deals is driving prices up. Still lower multiples than the U.S. or European peers.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
For sure.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
It has impacted differently depending on the sector: positive for e-commerce, marketplace, some B2B tools. Travel highly negatively affected. The advice is to try to reduce a little bit more the cash consumption, improve internal procedures and create processes to be more efficient.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Not really.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
Companies with zero revenue during two to three months have finally got their clients back.

Miguel Arias, Wayra

What trends are you most excited about investing in, generally?
Cybersecurity, enterprise SaaS, data analytics, AI/ML, future of work, edtech, gaming.

What’s your latest, most exciting investment?
Pridatect, Cobrainer, Kymatio, Vinehealth, Alias Robotics.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
Family planning. Cybersecurity for specific niches, Apps to bring AI to home appliances in a seamless way
What are you looking for in your next investment, in general?
Ambitious, tech-driven teams with global view around a disruptive sector fueled by shifts brought by 5G/AI/IoT/blockchain.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Data analytics, chatbots based on AI, e-health startups for doctors, videoconferencing apps, virtual events apps.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
More than 50% — but our local ecosystem is around the whole Teléfonica’s footprint (10 countries).

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Madrid: Deep tech around data, cybersecurity. Barcelona: B2C around gaming, classifieds, tourism tech. Munich: Industry 4.0, robotics. London: Fintech and enterprise SaaS.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Madrid: Positive with more talented individuals choosing the city as a great place to work remotely.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes, we see great founders in Galicia, Basque Country, Valencia, Andalucía with solid tech backgrounds and motivated teams, and they are now able to compete on a global scale.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Retail. New behavioral patterns based on the new normal.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
We have not changed our investment budget, but we are not meeting teams in person now. We are searching for the best founders who have a business fit with our corporation and geography feels even less important now. We are also paying more attention to follow-ups in the existing portfolio, so that they have enough cash to move past the pandemic.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, startups around edtech, remote collaboration tools, cyber, green tech are growing at a higher pace than before the pandemic hit.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I have seen our entrepreneurs being less affected by COVID than expected and with lots of energy to pivot, find new sources of revenues, adapt, etc. I have seen more people caring about their friends, family, colleagues and I am optimistic that we might change some behaviors for the better after the pandemic.

Any other thoughts you want to share with TechCrunch readers?
I don’t know if this is the best time ever to found a startup, but it is true that there is a seismic change happening around core technologies and enablers from connectivity (edge/5G), to AI/ML, IoT or decentralized networks that will become a perfect storm for disruption over the next [few] years!

Carlos Sabater Navarrete, VAS Ventures

What’s your latest, most exciting investment?
Synthego.

What are you looking for in your next investment, in general?
Capital efficiency.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Cryptocurrencies, scooters.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
Less than 50%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Logistics, fintech, biotech.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Probably.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Tourism is very adversely affected, as well as ride-sharing or vehicle-sharing. Logistics will have to improve and expand to cope with demand. Digital identification and communications will also be very important for remote work. Telehealth will be of major importance to improve the current health care offering.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Our strategy has been unchanged, but we would advise companies to keep looking for differentiation. There are certain topics that are seeing a surge in number of companies but with a severe lack of originality.

Mathieu Carenzo, founding partner, Venture Hub

What trends are you most excited about investing in, generally?
B2B/B2B2C, SaaS and marketplaces.

What’s your latest, most exciting investment?
Trioteca.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
we need to find a way to give transparency to the early-stage startup financing process in a lean and effective manner for entrepreneurs to level the playing field. The B2B SaaS opportunity in managing better workforce remotely is at the same time crowded and lacking of innovation.

What are you looking for in your next investment, in general?
Traction and team.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
HR matching talent.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
80%.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
I wish i knew! :-) Glovo; Bizaway; Luca Carlucci, Ricard Garriga.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Great talent pool; competitive salaries; attractive, good valuations.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
No, we will back to normal (95% confidence :-)) as soon as the government authorities allow us to do so.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Business real estate is in jeopardy … at least with the pre-COVID prices.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Raise bigger rounds to get longer runway in the time of uncertainty … that means less rounds but bigger. Cash in hand becomes as important as metrics.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I have no doubt that crisis brings opportunities and good entrepreneurs are not waiting for the crisis to end eventually but they act on it. My job is to find those entrepreneurs.

Giovanni Bologna, associate, Athos Capital

What trends are you most excited about investing in, generally?
Edtech, fintech, agtech, productivity tools. Preference for B2B SaaS and marketplace business models, but looking at direct to consumer too.

What’s your latest, most exciting investment?
Genially.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
We would like to see more edtech solutions; more fintech B2B. Definitely would like to see more insurtech and agtech.

What are you looking for in your next investment, in general?
In general, all solutions improving traditional businesses and business models. Looking for teams who are able to manage cash efficiently; positive unit economics since the beginning.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
Oversaturated: Fintech B2C (e.g., challenger banks), productivity tools, HR solutions, boat rental marketplaces, food delivery. Concerned about mobility-related startups; aim is very useful, but (i) competition and (ii) asset-heavy business model make such opportunities a tough call.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
80% investments in Spain, 20% rest of Europe. Within Spain, investments are distributed among Barcelona, Madrid, Valencia, Andalucía.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Industries well-positioned to thrive, with examples of companies we are excited about:

In portfolio:

  • Edtech: Lingokids (Cristobal Viedma).
  • Content tools: Genially (Juan Rubio).
  • Productivity tools: Comeet.me (Jordi Llosa).
  • Fintech B2B: Unnax (Juían Díaz-Santos), eID (Iván Nabalón).

Not in portfolio:

  • HR solutions (Factorial, Cobi, Typs).
  • Productivity tools: Holded.
  • DTC: Brava Fabrics (Ramón Barbero).

Not excited long term: Fintech B2C, gym- and exercise-related companies, home refurbishment marketplaces.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Investment climate in Spain and Barcelona: very promising, availability of talent at lower cost than in other European hubs; several state aids and public financing programs. Valuations are still lower than European average. Spain offers opportunities typical of an ecosystem that is maturing.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
Yes, definitely. In Spain, regions to look at are Comunitat Valenciana, Andalucía, País Vascos, Galicia.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Looking weaker: hospitality, real-estate related (e.g., WeWork and the likes), mobility-related. Opportunities: new ways of doing tourism; new ways of communicating (improving productivity out of the office’s walls); new ways of marketing products online (in a cost-efficient way, to cut increasing costs); new concepts of e-commerce, especially of apparel industry.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Impact: Much more attention is paid on how cash has been used and how it will be used. Biggest worry: Runway and when/how to raise their next round. What will happen in case another lockdown is imposed. Advice: Try to become CF neutral to see how the situation will evolve. Better to “destroy value” today to preserve the company tomorrow, than “preserving value” today but having no company tomorrow.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
Yes, Edtech and productivity-related companies have been growing very nicely. Retention seemed to be an issue for edtech over the summer, but apparently it has behaved better than expected.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
End of lockdown; e-commerce growth; people still traveling (even though to much closer places); lots of ideas and energetic entrepreneurs popping up with exciting solutions. We are indeed raising our second fund, and it is a very exciting moment to do that.

Any other thoughts you want to share with TechCrunch readers?
Spain and southern Europe are in front of a huge opportunity. The mix of talent, available capital and stage of maturity of the ecosystem can really boost its positioning as a European startup hub.