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The Scaleup ‘Clasico:’ Barcelona vs. Madrid

Data shows that innovation ecosystems are typically characterized by a strong concentration of scaleups around one city per country—typically the capital. Cities like London and Paris aggregate almost 70% of the innovation economy (number of scaleups and capital raised). That is despite representing only 20-25% of the GDP and representing 20% of the population in their respective countries. 

Spain’s scaleup hotspots

Spain is the only European country with two main scaleup hot spots (Barcelona and Madrid) of almost comparable size. Spain’s main tech hot spot is also not its capital Madrid, but rather, Barcelona. Based on Mind the Bridge’s Tech Scaleup Spain 2022 report, published with the support of Crunchbase and Acciona, Barcelona hosts 306 tech scaleups that raised $6.7 billion since inception, respectively 44% and 50% of Spain’s totals. Madrid hosts 234 scaleups (34% of the country’s total) that raised $5.1 billion, approximately 39% of the country’s total. With 45 scaleups that raised $500 million Valencia, Spain, is the third largest startup hot spot in Spain, although it is significantly smaller than Barcelona and Madrid in terms of total number of startups and capital raised.

 
Barcelona versus Madrid tech scaleup ecosystems chart with number of scaleups and capital raised
 

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 large Spanish companies are headquartered in Madrid, and corporate venture capital activity in Spain hasn’t been properly captured.

That said, recent funding data suggests Madrid is catching up to Barcelona. In 2021—a record year for both ecosystems—for the first time in its history, Madrid scaleups raised more money than their Catalonian counterparts.

 
bar chart with new capital raised YoY in Barcelona and Madrid
 

The Clasico has moved from soccer fields to innovation and startups. Jobandtalent reaching unicorn status is the most recent Madrid answer to the 2.3 billion euro acquisition of Barcelona-based Glovo. The “two-horse” Spanish tech race is without a doubt intriguing, but where do they stand in the broader European landscape of innovation hubs?

 

Spain vs. Europe

 
Bar chart with total number of scaleups and capital raised in European cities
 

Barcelona stands in fifth place on the Mind the Bridge index of European tech scaleup city hubs, while Madrid sits in 10th. Barcelona and Madrid’s current size is comparable with hot spots 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, mirroring the gap between the Spanish ecosystem and the main European countries. 

The question (still to be answered) is whether having two hot spots in Spain is paying off in a world where innovation tends to be highly concentrated in one city in each country. Data seems to suggest the opposite, but there is a need for more sustainable, distributed geographical economic development. Post-COVID trends of remote work may also hint at radically changing future scenarios.

Time will tell whether the Spanish multipolar system will become a model of distributed development for the European economy. But for now, let’s enjoy the “Scaleup Clasico.”

 
Mind the Bridge tech scaleup Spain report 2022 cover

Click here to download the Tech Scaleup Spain 2022 report.

  • Originally published July 8, 2022