In 2025, Spain’s startup ecosystem has seen a number of main VCs closing new funds, highlighting the nation’s rising potential.
Though Madrid and Barcelona proceed to dominate as the first hubs, cities like Valencia, Málaga, Bilbao are rising as key gamers in Spain’s entrepreneurial panorama.
To realize insights on this shift, we reached out to a number of Spanish VCs that closed funds this 12 months, asking them to touch upon the developments, capital motion, and the evolving startup ecosystem.
Armilar Enterprise Companions: Specializing in DeepTech throughout Iberia
Armilar Enterprise Companions, with its €120 million fund focused on DeepTech and digital transformation, has a eager curiosity within the rising potential of Spanish and Portuguese startups.
Joao Dias, Associate at Armilar, shared his ideas on Spain’s startup evolution and the decentralisation of entrepreneurship:
“The Spanish ecosystem is maturing and entrepreneurship is increasing to different areas notably Valencia but additionally Bilbao and others. These areas profit from vibrant universities, a rising variety of ecosystem enablers and an rising group of scale-ups that set the tempo and act as regional champions. Nonetheless, for many of those ecosystems, it’s early days.”
Armilar has a powerful Iberia focus and seeks Sequence A alternatives. Its funding thesis lies on the intersection of digital applied sciences and utilized science, backing B2B startups with excessive technological content material that resolve vital enterprise issues throughout a broad vary of industries and purposes – from AI to cybersecurity, from software program improvement to infrastructure and computing, from digitalisation to automation, from FinTech to HealthTech, and together with SpaceTech and dual-use applied sciences.
4Founders Capital: A broader have a look at Spain’s deal circulate
4Founders Capital closed its third fund at €70 million, exceeding preliminary goal. The agency accomplished the ultimate closing of its new automobile simply six months after the primary shut, reaching €134 million underneath administration.
This new fund has already made 5 investments in startups at pre-Seed and Seed levels.
Paula Blázquez, Associate at 4Founders Capital, mentioned how the startup scene is evolving throughout the nation, notably in relation to entrepreneurship exterior the standard hubs:
“In relative phrases, we’re certainly seeing progress in entrepreneurship exterior Madrid and Barcelona, though these two cities stay the nation’s predominant hubs. Larger office flexibility after Covid-19, hybrid fashions, and competitors for technical expertise have made it simpler for founders and groups to determine themselves in cities comparable to Valencia or Málaga, amongst others. Moreover, components just like the local weather and high quality of life are attracting worldwide expertise to those areas.”
Blázquez additionally emphasised that, regardless of the rise of regional innovation, 4Founders Capital’s strategy stays unchanged:
“Our strategy has not modified: 4Founders Capital has at all times regarded for alternatives throughout Spain. Though traditionally the biggest quantity of deal circulate comes from Madrid and Barcelona, we stay open to any location. What really determines our curiosity is the founding group – their background, abilities, and angle – not the town the place they function. Innovation can emerge wherever, and we’ve seen this repeatedly.
“It’s sufficient to notice that the Spanish firm with the biggest market capitalisation was not based in both of those hubs, however is headquartered in Galicia.”
Blázquez is in fact referencing Inditex, the multinational clothes firm recognized for manufacturers like Zara, which is predicated in Arteijo, a small city in Galicia. Regardless of being headquartered exterior the standard enterprise epicentres of Madrid and Barcelona, Inditex has grown to turn into the biggest Spanish firm by market capitalisation.
Blázquez’s level underscores the broader narrative that innovation and profitable companies can emerge from any area, not simply the obvious startup hubs, reinforcing the significance of nurturing expertise and entrepreneurship throughout the nation.
Suma Capital: Investing in ClimateTech and decentralisation
Suma Capital, which launched a €210 million ClimateTech fund, is one other agency embracing the decentralisation of Spain’s startup ecosystem. Natalia Ruiz, Associate at SC Enterprise – Scale-ups, and Josep Miquel Torregrossa, Associate at SC Enterprise – Early-stage, shared their views on the shifting dynamics of Spain’s innovation hubs:
“At Suma Capital, we’re seeing rising entrepreneurial momentum past the standard innovation hubs. Cities comparable to Valencia, Málaga, and Bilbao have been consolidating their positions as centres of innovation for years, and we are actually additionally figuring out growing exercise in mid-sized capitals with robust technological or industrial foundations, together with Toledo, Vigo, and Zaragoza.
“We consider that improved digital infrastructure, robust expertise swimming pools, and nearer collaboration between universities and the enterprise group are driving this shift.“
They additional identified the influence of this decentralisation on their funding technique:
“This decentralisation of entrepreneurship broadens our sourcing panorama and strengthens our capacity to establish progressive options that contribute to decarbonisation. Many of those initiatives are rising exterior Madrid and Catalonia, making this territorial capillarity a aggressive benefit for our technique.”
Additionally they highlighted the influence of the regional unfold in Suma Capital’s portfolio:
“At SC Enterprise, by our funds SC Web Zero Ventures (scale-ups) and SC Climatech Ventures (startups), we spend money on options that speed up the local weather transition, no matter the place they’re primarily based. In truth, 40% of the businesses in our enterprise portfolio are headquartered exterior the standard hubs. This determine displays a transparent pattern: a extra various and specialised Spanish ecosystem, more and more supported by institutional and company backing. Altogether, these developments level in the direction of a extra sturdy, much less concentrated mannequin with larger long-term influence potential.”
Toledo and Valencia Lead in Enterprise Creation
A latest report by Iberinform and Remitly highlighted Toledo as the very best province in Spain for beginning a enterprise, with 16% enterprise progress and a 97% survival fee for startups. Valencia additionally made a powerful exhibiting, with 13% progress and a survival fee of 95%. These cities are more and more changing into enticing locations for entrepreneurs, providing robust enterprise ecosystems and help constructions for brand new ventures.
Whereas cities like Madrid and Barcelona stay the first startup hubs, the rise of different areas, particularly Toledo and Valencia, displays a broader pattern of decentralisation. These areas are benefitting from robust digital infrastructure, high quality of life, and entry to expertise – key components contributing to their rising position in Spain’s startup ecosystem.
The Path Ahead for Spain’s Startup Ecosystem
The expansion of regional innovation hubs is likely one of the most fun developments in Spain’s startup ecosystem. As extra cities like Valencia, Málaga, and Bilbao construct their entrepreneurial networks, the Spanish startup scene is changing into extra diversified and fewer concentrated within the conventional hubs of Madrid and Barcelona.
See our earlier protection of Spanish cities and their startup exercise and potential
As famous by the VCs we spoke with, the longer term lies in supporting distinctive entrepreneurs regardless of the place they’re primarily based. With elevated connectivity, digital instruments, and a shift in the direction of hybrid working fashions, the startup panorama in Spain will probably proceed to develop and evolve within the years to come back.
