Located in the center of the Iberian Peninsula, Madrid has become the main financial center of Spain, as well as the home of numerous multinational companies and nomadic innovators.
Madrid is in 5th position in terms of the number of creation of new startups in the European classification, only behind large cities such as London, Paris, Berlin and Amsterdam.
6th place in the Tech Cities of the Future ranking, which deals with locating the European regions that have the most promising prospects in terms of investment in startups, technology and innovation.
7th position in Europe in terms of number of computer developers professionals in a city.
The Spanish entrepreneurial ecosystem
The entrepreneurial ecosystem in Spain has grown greatly since 2015 according to the Spanish Tech Ecosystem report. The Spanish national entrepreneurial ecosystem managed to reach a value of more than 47,000 million euros in 2021, compared to 10,000 million in 2015.
The entrepreneurial ecosystem of Madrid
One of the largest startup cradles in Europe. It is been only ten years since Madrid’s entrepreneurial ecosystem began to take hold.
“Madrid is generating a strong ecosystem between universities, institutions, administrations and private entities, we no longer go alone” — Paloma Bel, director of the Compluemprende program at the Complutense University of Madrid.
Madrid, international territory, innovative and very attractive
- One of the reasons for its recent success is its exceptional location.
- Based on the report carried out by the GEM (Global Entrepreneurship Observatory), which annually studies entrepreneurial activities both nationally and internationally, the Entrepreneurial Activity Rate in the Community of Madrid is 7.1%, compared to the Spanish average which is at 6.5%.
- It is characterised by being an open ecosystem and very receptive to new talent from any country or territory. In addition, each year it also exports talent and companies abroad, helping them to internationalise around the world.
- On the other hand, it has a very solid communications infrastructure, and as if that were not enough, it is a point that greatly facilitates international connection with Latin American countries.
Considering the current post-pandemic situation, the position in qualifying lists and rankings loses relevance. Much more important is the ability of the system to recover and respond to the challenges that society poses.
Issues such as economic recovery, climate change or the ability to attract talent from abroad are some of the most difficult issues in which Madrid, due to its entrepreneurial culture, accessibility to funds, connections with the industry, regulation and access to talent, is managing to face gradually with great success.
“The Community of Madrid has a powerful ecosystem in terms of infrastructure, positioning and number of investors”, “In recent years there has been an evident change in mentality” — Maria Benjumea, director of Spain Startup.
Response to economic recovery challenges
It is obvious that the coming years will be truly fundamental, and many international organisations have already placed all their trust in newly created companies as channels for innovation, with the aim of achieving the recovery of sectors such as tourism or transport through the latest cutting-edge technologies.
In fact, lately we have been able to see how Madrid stands out in the sectors of logistics, transport, health, and Information and Communication Technologies.
Specifically, fintech, software development, transport and cybersecurity companies have drawn attention due to their great ability to attract investors, accounting for 80% of the total in 2021.
In summary, the entrepreneurial ecosystem of the Spanish capital is enormously heterogeneous and with a great capacity to adapt to circumstances, as has been observed after the pandemic.
Accessibility to both public and private funds
Spain generally has fewer investors in series B or higher investment rounds than other countries, which translates into increased interest from international funds in the country’s startups. In fact, as we have already mentioned, in 2021 Madrid was in sixth position in terms of attracting new funds, 460 million euros that will be used during the following years.
In addition, as part of the new Startups Law of the “Spain Entrepreneurial Nation Strategy” there are tax incentives similar to the British Seed Enterprise Investment Scheme, and a better tax situation for stock options.
The opportunities for work and collaboration with multinationals and the most innovative entities are really interesting in Madrid, since around 65% of the companies belonging to the IBEX 35 are found in the city, more than 30% of the total investment in innovation. and the highest percentage of exporting organisations in the country.
Entrepreneurial culture and access to technology
Taking into account that Madrid has a really powerful technological infrastructure and nearly 300 incubators, accelerators and business schools that support the most innovative startups, it could be said that the Spanish capital has one of the highest densities of private spaces for startups.
“The capital is a bridge to the Latin American and European markets. Spain is a leader in infrastructures and, specifically, Madrid in entrepreneurial initiative programs” — Isidro De Pablo, Director responsible for the team at GEM Spain Entrepreneurship Observatory.
Regulations and talent access
The number of students who graduate each year in STEM areas (Science, Technology, Engineering and Mathematics) is also really high, which could ensure that in the coming years, the country will have new and well-prepared leaders for the innovation and the creation of technology companies.
On the other hand, the Startups Law is going to make it easier to process visas at the national level, so that self-employment is better regulated.
In conclusion, it can be said that the end of 2021 and 2022 so far, position the Community of Madrid as a truly attractive and favourable international destination, both for investors and entrepreneurs, of any origin, truly committed to the innovation, sustainable development and international recovery.
Currently, BøthOfUs is working close with support systems in the city of Madrid, BøthOfUs is working with Incubators, accelerators,VCs, Family office, university innovation departments in Madrid to support startups, to help startups with market, business model, app, web, design creation and raising funding.
If this sounds interesting to you, let us know! We’d love to have a chat! Book a 20 min free call — https://calendly.com/kay_bothofus/intro
Marina — Spanish speaking countries
Kay Nag — Co-Founder
Joel Yeap — UK & English speaking countries