Investments

Barcelona’s startup ecosystem is bigger than Madrid’s. But does it really matter?

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Written by Jaime Novoa

Barcelona-based startups tend to receive much more attention from investors than Madrid’s. Is this a true reflection of the status of both ecosystems?

barcelona madrid startups

People from Madrid and Barcelona love to talk about who’s got a bigger startup scene. It doesn’t really matter, since both cities are a short train ride apart and should be focused on complementing each other instead of competing against each other, but from time to time the debate about which startup ecosystem is bigger comes back to light.

It happened again over the weekend. On Friday Webcapitalriesgo circulated its annual report analyzing the Spanish investment landscape and on Saturday our friends at Hemerotek published a post about it, claiming that ‘Barcelona is the startup capital of Spain’. Many, mostly from Madrid, considered this outrageous and started looking everywhere for figures that could dispute such claims.

Well, there’s no need to keep on looking because it’s true.

There are multiple ways of analyzing startup ecosystems, but one of the most common ones is through the number and size of investments received by startups. One might argue that this doesn’t truly reflect the importance or relevance of an ecosystem, but it’s certainly correlated if we take into account the key role investment plays when building and scaling technology startups.

And if you use investment as a measure, Barcelona’s (and Cataluña) technology ecosystem has been traditionally bigger than Madrid’s.

Thanks to figures shared by Webcapitalriesgo with Novobrief we’ve put together the two graphs and table visible below, which show that Barcelona’s startups have attracted more investor attention over the past few years.

spanish startups investment

spanish startups investment

While in 2012 and 2013 the difference between Madrid and Barcelona was of less than €10 million, things changed significantly in 2014 thanks to Scytl’s €77.8 million Series C round.

Although some have claimed on Twitter that Scytl’s round is the main culprit of this increase, this is not entirely true. If we were to subtract Scytl from the analysis, Cataluña’s companies would have still received €34 million more than those in Madrid.

Interestingly, the number of deals over the past three years have always been far superior in Barcelona than Madrid (see the table above).

It’s also worth noting that despite seeing a decrease in investments compared to 2012 and 2013, Valencia continues to solidify its position as the third main startup region in Spain.

So… does this mean anything? Is this really important? Not really, but at the same time it is. As mentioned before, there are many ways of measuring the relevance of startup ecosystems and not all are quantifiable. As an example, some say that Valencia’s scene is more tightly connected than in Madrid, but that’s hard to quantify and almost impossible to measure.

What’s quite clear at this stage is that Barcelona’s startups have received more investment over the past few years -possibly going back 10 to 15 years-. And the effect of rounds like Wallapop’s $120+ million might make the difference between regions even greater in 2015.

Does this really matter? Instead of debating who’s got a bigger scene, shouldn’t we celebrate that the country’s ecosystem as a whole is growing and that its two main cities are a short train ride away from each other?

About the author

Jaime Novoa

Jaime Novoa is the Founder of Novobrief.

He is a technology writer turned investor at Madrid's K Fund. He was also a data analyst at Tech.eu.