Madrid is catching up with Barcelona in the Scaleup “Clásico”, according to new report

- June 1, 2022

The eternal rivalry between Real Madrid and FC Barcelona dates back to the beginning of the early 20th century. Both cities have been through history fierce competitors in sports, but also in terms of attracting business and innovation to their regions.

Mind the Bridge, a global organization that provides innovation advisory services for corporates and government organizations, presented its latest “Tech Scaleup Spain” Report with the support of ACCIONA and Crunchbase, which highlights how Madrid is catching up with Barcelona, the main tech hotspot of the country, in what they are calling the Scaleup “Clásico”.

This document was presented in the context of the Mind the Bridge Scaleup Summit Barcelona. The central idea referred to in the report is that Spain represents a unique case in the European tech scaleup ecosystem. Two are the main reasons: Spain is the only European country with two main scaleup hotspots of almost comparable size – Barcelona and Madrid;  also that the capital city is not the main tech hotspot.

Quality of life and the ability to attract international talent are the main factors supporting Barcelona’s prevalence. This is despite the fact that the vast majority of the large Spanish companies are headquartered in Madrid. Then corporate venturing activities seem to have not yet been properly captured.

But where do they stand in the European landscape of innovation hubs? Barcelona stands in 5th place on our index of European tech scaleup city hubs, while Madrid closes the top ten ranking. Their current size is comparable with hotspots such as Amsterdam and the Nordic capital cities, Munich, Zurich, and Milan. The gap between the top European cities (London, Paris, Stockholm, and Berlin) remains large and it mirrors the gap between the Spanish ecosystem and the main European countries.

Time will tell whether the Spanish multi-polar approach might become a model for a more sustainable innovation ecosystem in Europe

“Nowadays the New Economy is concentrated in one hotspot per country, typically the capital city that in most cases aggregates up to 70% of the innovation economy”, commented Alberto Onetti, Chairman of Mind the Bridge. “Data would suggest that having two hotspots is not paying off in a world where innovation activities tend to be brutally concentrated. Nevertheless, a need for a more sustainable, distributed geographical economic development and – last but not least – post-Covid trends of work remotization may hint at radically changing future scenarios.”

Two tech horses racing

The report highlights and summarizes some facts and figures about these two “tech horses”, as they are calling the Madrid and Barcelona hubs. According to “Tech Scaleup Spain”, as of December 2021 Spain hosts a total of 693 Scaleups: 1.5 scaleups for every 100K inhabitants, just below the European average (1.76). The gap with France (3) and the UK (5.5) currently is too wide to be bridged but Spain outperforms all other Southern European countries. These scaleups raised $13.2B overall, 0.67% of the country’s GDP, less than the European average of 0.98% but, still, 3 times higher than Italy. In addition, the country hosts 19 “scalers” (i.e. scaleups that raised more than $100M since inception) and the only “super scaler” in the Southern European region, Glovo ($1.2B raised).

In this frame, Barcelona hosts 306 tech scaleups that raised $6.7B since inception (respectively 44% and 50% of the country’s totals); Madrid’s hub, the country’s capital city, is approximately 20% smaller, hosting 234 scaleups (34% of the country’s total) that raised $5.1B (approximately 39% of the country’s total).

On leap years and scaleup life

According to the report, 2014 was the first “leap year” for Barcelona, highly driven by the large IPO of eDreams- Odigeo ($0.5B), and between 2015 and 2018 this ecosystem started to speed up its growth, reaching an average of approximately 27 new scaleups and $0.5B raised per year. Madrid reached these levels only in 2018, showing a 3 year gap.

There’s indeed “scaleup life” beyond the two cities, despite the fact that they host the vast majority (78%) of Spanish scaleups together. With 45 scaleups and $0.5B raised, Valencia is the third-largest scaleup hotspot in Spain, followed by Bilbao (11 scaleups, $0.2B raised), Alicante and Malaga (8 and $0.1B, each), San Sebastian and Seville (7 and ~$25M each), Palma De Maiorca and Murcia (5 scaleups each), the last one hosting the cleantech giant Soltec that raised $176M raised since inception.

“Based on the most recent investment trends, it is likely that both Spanish hotspots will keep improving”, ended Alberto Onetti. “The new economy is definitively the only possible driver for European growth. That said, too much concentration is neither desired nor sustainable. Time will tell whether the Spanish multi-polar approach might become a model for a more sustainable innovation ecosystem in Europe.”