Mwc spanish startup_ecosystem
- 4. STARTUPS IN SPAIN More than 20 years creating tech companies Source: Novobrief, Vitamina K
- 5. STARTUPS IN SPAIN Spain: The digital sector continues to grow • Digital sector to account for 3.1% of Spain’s GDP in 2016, €34.9 billion • Telco-driven sector • 2,638 startups (+26% YoY) • 3 main hubs: • Barcelona: 26% of all startups, +16% YoY • Madrid: 27%, +25% • Valencia: 14%, +32% Source: Boston Consulting Group, McKinsey, Startupxplore
- 6. Barcelona and Spain’s climate, lifestyle, talent pool, low cost structure and other factures have helped it attract significant foreign talent (founders, employees and investors) STARTUPS IN SPAIN Spain: attracting talent from abroad Alex Puregger (Fon) Marek Fodor (Atrapalo, Kantox) Philippe Gelis (Kantox) Dominique Leca (Stuart) Ben Askew-Renaut (Packlink) Sacha Michaud (Glovo) Mauricio Prieto (eDreams) David Okuniev (Typeform) Gustavo GBrusilovsky (BuyVIP) Conor O’Connor (Hot Hotels)
- 7. STARTUPS IN SPAIN Spain: competitive workforce, hard to find Average tech salary San Francisco New York UK Europe Ireland Sweden Germany France Italy US$0 US$60000 US$120000 Source: AngelList SPAIN Number of developers San Francisco London Paris Moscow Istanbul Berlin Stockholm Lisbon Oslo 0 45,000 90,000 MADRID • Less expensive to build companies • Healthy developer density • BUT • Technical talent at big firms • Hard for startups to attract that talent • Lack of big nation- wide success Amazon (Adam Sedó, PR Manager ): “Tech talent in Spain is abundant, but most importantly available” Source: Atomico, Stackoverflow
- 8. Source: Novobrief 2015, RECORD YEAR €500m+ raised by Spanish startups for the 1st time ever Investment received by Spanish startups 0 150 300 450 600 2013 2014 2015 Deals Investment (m€) 535 286 222
- 9. MEGA ROUNDS 13 rounds bigger than €10m 2013 2014 2015 2X €10m+ rounds in 2015 vs. 2013 and 2014 combined
- 10. HEALTHY MIX OF INVESTOR TYPES VCs and business angels as key ecosystem drivers Source: Venture Watch Distribution of deals by investor type (Q1-3 2015 vs. 2014) 0 % 25 % 50 % 75 % 100 % 2014 2015 27 % 15 % 43 % 59 % Venture Capital Business Angel BA Network Public funding Corporation Corporate VC Crowdfunding Accelerator (69) (17) (37) (59)
- 11. WHERE DOES THE MONEY GO? An ecommerce (or mobile classifieds) country Source: Venture Watch Top investment sectors 2013-15 (number of deals) Ecommerce Marketing Lifestyle Fintech Travel Communications Education Gaming Data Food 0 17.5 35 52.5 70 Sectors that have received most investment volume 2013-15 (M€) Ecommerce Fintech eGovernance Security Marketing Communications Employment Gaming Data Lifestyle €0 €100 €200 €300 €400
- 12. FOREIGN INVESTORS NOT ONLY COME FOR THE SUN Growth capital mostly provided by international investors • Most ever: 44 VCs • Fueling growth: 73% of all capital invested in 2015 • Only one round of €10m+ (Jobandtalent) with no participation of foreign VCs In what type of rounds did foreign VCs participate in in 2015? 17 % 13 % 19 % 15 % 35 % €1 to €5m €6 to €10m €11 to €15m €16 to €20m €20+m Source: Novobrief
- 13. FOREIGN CAPITAL: 3 MAIN SECTORS International investors mostly invested in these sectors Wallapop, Letgo, Fever • Accel Partners • Fidelity Growth Partners Europe • Northzone VC • 14W • Insight VP • Naspers Limited Kantox, Novicap, peerTransfer, Digital Origin • Bain Capital • Spark Capital • Partech Ventures • IdInvest Partners • Techstars Ventures • Tekton Ventures • QED • Devonshire Investors • Accel Partners CartoDB, Typeform, Userzoom • Earlybird VC • Accel Partners • Index Ventures • Salesforce • PNC • RTA Ventures • TC Growth Partners • StepStone Group Mobile marketplaces Fintech ‘Pure software’
- 15. A DIGITAL COUNTRY Barcelona drives Catalonia’s digital economy • 10,700 ICT companies • 73,000 employees • €14.5b in turnover (1/5 of Spain) • €214m in R&D • Barcelona startups: • Revenue: €6b • Workforce: 9,500 • International activity: 60% are active abroad Source: Barcelona Activa (early 2015) & BCN Tech City survey
- 16. A DIGITAL COUNTRY Barcelona’s startup ecosystem Source: BCN Tech City / Startupxplore Young: 4.8 years Market: 41% B2B 26% B2C 33% B2B2C Sectors: 13% media 12% mobile 11% enterprise 6% marketing Funding: 52% have received investment from business angels 33% went through an accelerator International: 60% active outside of Spain, in more than 50 countries
- 17. A DIGITAL COUNTRY Education + entrepreneurs + funding + public institutions/coworkings = success Education Funding
- 18. A DIGITAL COUNTRY Barcelona’s ecommerce & mobile economy Source: Startupxplore Most common type of startup in Barcelona (as % of total market) Ecommerce Mobile Enterprise Marketing Other Travel Communications Health Consumer web Media Education Sports Gaming Software 0.0 % 3.5 % 7.0 % 10.5 % 14.0 % Ecommerce 13.4% Mobile 12.8% Enterprise 10.8% Marketing 6.2% Travel 5.9% Comms 5.7% Health 5.2%
- 19. BARCELONA DOMINATES STARTUP INVESTMENTS 60% of all euros invested in 2015 went to Barcelona-based startups* €0 €175 €350 €525 €700 Barcelona* Madrid Valencia 19.7 165 324 2011 2013 2014 2015 Source: Webcapitalriesgo, Novobrief * Barcelona and rest of Catalonia
- 20. BIGGEST ROUNDS IN BARCELONA Explosive growth Source: Webcapitalriesgo, Novobrief Largest investment rounds in 2015 (€m)* Letgo Wallapop UserZoom Digital Origin Typeform Kantox Softonic Deporvillage Loanbook Marfeel 0 25 50 75 100 €3 €3 €4 €6 €10 €13 €15 €30 €40 €92 • €264m invested in Barcelona startups • Hypergrowth: +96% YoY • 92% of all capital invested inall of Spain in 2014 (€285m) *This analysis includes Wallapop’s widely reported, but not officially confirmed, $100 million round
- 21. CATALONIA’S TOP SECTORS Mobile classifieds, ecommerce & fintech Source: Webcapitalriesgo, Novobrief Startup sectors that attracted more investment in 2015 13 % 3 % 10 % 13 % 61 % Ecommerce ‘Pure software’ Fintech Health Other • Wallapop, Letgo & other ecommerce/classifieds startups lead the way • Enterprise technology represented by UserZoom, Typeform, comes in second • Fintech (payments - Digital Origin, FX - Kantox) third • 5 investment rounds of €1m+ for health startups
- 22. INCREASING M&A ACTIVITY Creating wealth through exits Trovit Akamon La Nevera Roja* Founded in… 2006 2011 2011 Number of years to exit 8 4 3 Selling price €80m €25 €80m Rounds of funding 1 (€150,000) 3+ (€2.8m) 3+ (€10m) Revenue in last full fiscal year before exit €17.5m (2013) €15m (2014) €2m (€40m in reported restaurant sales) EBITDA in same period €6.2m €800K (profit) Undisclosed (not profitable) Revenue multiple paid by acquirer 4.5X 1.6X 40X Employees 92 ~ 100 ~ 40 Stake (%) of founders at time of exit ~ 90% ~ 78% ~ 30% Founder earnings €72m €19.5m €24m Investor earnings €8m (57X) €5.2m €48m Significant exits in recent years: • Key to spark entrepreneurship, new startups and redistribution of wealth • More than $155 million in exits in past two years • Recent exits: • Trovit (Next Co): €80m • bodas.net (Weddingwire) • Akamon (Imperus): €25m • Icebergs (Pinterest) • Ducksboard (New Relic) • Nubera (Gartner) Source: Novobrief *Madrid-based
- 24. EUROPEAN CONTEXT Very small VC per capita VC investments per capita 2014 (€) €0 €100 €200 €300 €400 Israel USA UK Spain 625 141 371 • Spain: more investments and money than ever • In other main tech hubs in 2015… • US: €50b+ • UK: €4.5b • Germany: €2.4b • Israel: €1.6b • France: €1.5b • Spain: €0.5b Source: Pablo Ventura, Dealroom, NVCA
- 25. EUROPEAN CONTEXT Low density of business angels Source: Atomico / AngelList Density of business angels in Europe London Paris Berlin Helsinki Moscow Istanbul Amsterdam Stockholm Munich Zurich Dublin Copenhagen Vienna Hamburg Brussels Oslo 0 625 1,250 1,875 2,500 BARCELONA MADRID Business angels per ,000 people Helsinki Zurich Brussels London Amsterdam Dublin Paris Stockholm Copenhagen Berlin Munich Oslo Vienna Hamburg Moscow Istanbul 0 0.15 0.3 0.45 0.6 BARCELONA MADRID 161 0.1 0.05 168
- 26. EUROPEAN CONTEXT Spain accounts for small fraction of EU exits & M&A value M&A deals in Europe (Q1-3 2015) 7 % 93 % Rest of Europe Spain • 7% of all EU deals • 446 in EU: • Germany: 88 • UK: 62 • Israel: 50 • Spain: 29 • France: 28 • 6% of all M&A value (€8b) • Telco-driven Source: tech.eu
- 27. EUROPEAN CONTEXT Limited impact of Spain’s ‘Ley de emprendedores’ • Spanish government approved in 2013 ‘Ley de emprendedores’, an entrepreneur-friendly law to promote startups and the creation of new companies • Its impact has been very limited • Spanish entrepreneurs and investors continue to face significant challenges: • High taxes at the early stage for founders • Exit tax when expanding and changing residency to a non-EU country • Lack of stock option schemes due to high taxes • High taxes for business angels
- 28. CONCLUSIONS 2015: A YEAR TO REMEMBER Record investment numbers & notable exits: 2015 was a record year for Spain and Barcelona on various fronts: for the first time ever, Spanish technology companies received investment of more than €500 million, fueled by the participation of a record number of international investors (44 VC firms) and producing notable exits such as Trovit, La Nevera Roja or Akamon. Worldwide category leaders: Startups such as Wallapop and Letgo -both based in Barcelona- have become category leaders in the mobile classifieds sector, becoming the two most well funded startups in the world to try to conquer the US market. Scytl, born in 2002 and the most successful spin-off in the technology history of Spain, has also consolidated its position as the leading eGovernment company in the world and plans to IPO on the Nasdaq in 2017. Things can, and should, get better: Investment per capita in Spain represents a small fraction compared to other European countries, and so do the number of startup exits or business angels. This, coupled with unfriendly laws for entrepreneurs and investors (exit tax, no stock options and high taxation of business angels’ activity), pose a strong challenge for the development of the country’s technology ecosystem.
- 29. THANK YOU
- 30. All of the charts, tables and figures that are included in this report come from publicly available sources. Special thanks to: METHODOLOGY