Spain's digital sector continues to grow rapidly, accounting for 3.1% of GDP in 2016. The startup ecosystem is concentrated in three main hubs - Barcelona, Madrid, and Valencia. Barcelona attracts significant foreign talent and investment due to its climate, lifestyle, talent pool, and lower costs. In 2015, Spanish startups raised over €500 million for the first time, with 60% going to Barcelona-based companies. Mobile classifieds, ecommerce, and fintech attracted the most investment. While progress has been made, investment per capita and the number of exits remain well below other European countries due to tax policies and a lack of stock option schemes.

3. THE SPANISH
STARTUP
ECOSYSTEM

4. STARTUPS IN SPAIN
More than 20 years creating tech companies
Source: Novobrief, Vitamina K

5. STARTUPS IN SPAIN
Spain: The digital sector continues to grow
• Digital sector to account for
3.1% of Spain’s GDP in 2016,
€34.9 billion
• Telco-driven sector
• 2,638 startups (+26% YoY)
• 3 main hubs:
• Barcelona: 26% of all
startups, +16% YoY
• Madrid: 27%, +25%
• Valencia: 14%, +32%
Source: Boston Consulting Group, McKinsey, Startupxplore

6. Barcelona and Spain’s climate, lifestyle, talent pool, low cost structure and
other factures have helped it attract significant foreign talent (founders,
employees and investors)
STARTUPS IN SPAIN
Spain: attracting talent from abroad
Alex Puregger
(Fon)
Marek Fodor
(Atrapalo, Kantox)
Philippe Gelis
(Kantox)
Dominique Leca
(Stuart)
Ben Askew-Renaut
(Packlink)
Sacha Michaud
(Glovo)
Mauricio Prieto
(eDreams)
David Okuniev
(Typeform)
Gustavo GBrusilovsky
(BuyVIP)
Conor O’Connor
(Hot Hotels)

7. STARTUPS IN SPAIN
Spain: competitive workforce, hard to find
Average tech salary
San Francisco
New York
UK
Europe
Ireland
Sweden
Germany
France
Italy
US$0 US$60000 US$120000
Source: AngelList
SPAIN
Number of developers
San Francisco
London
Paris
Moscow
Istanbul
Berlin
Stockholm
Lisbon
Oslo
0 45,000 90,000
MADRID
• Less expensive to
build companies
• Healthy developer
density
• BUT
• Technical talent at
big firms
• Hard for startups to
attract that talent
• Lack of big nation-
wide success
Amazon (Adam Sedó,
PR Manager ): “Tech
talent in Spain is
abundant, but most
importantly available”
Source: Atomico, Stackoverflow

8. Source: Novobrief
2015, RECORD YEAR
€500m+ raised by Spanish startups for the 1st time
ever
Investment received by Spanish startups
0
150
300
450
600
2013 2014 2015
Deals
Investment (m€) 535
286
222

9. MEGA ROUNDS
13 rounds bigger than €10m
2013
2014
2015
2X €10m+ rounds in 2015
vs. 2013 and 2014
combined

10. HEALTHY MIX OF INVESTOR TYPES
VCs and business angels as key ecosystem drivers
Source: Venture Watch
Distribution of deals by investor type
(Q1-3 2015 vs. 2014)
0 %
25 %
50 %
75 %
100 %
2014 2015
27 %
15 %
43 %
59 %
Venture Capital Business Angel BA Network Public funding
Corporation Corporate VC Crowdfunding Accelerator
(69)
(17)
(37)
(59)

11. WHERE DOES THE MONEY GO?
An ecommerce (or mobile classifieds) country
Source: Venture Watch
Top investment sectors 2013-15
(number of deals)
Ecommerce
Marketing
Lifestyle
Fintech
Travel
Communications
Education
Gaming
Data
Food
0 17.5 35 52.5 70
Sectors that have received most
investment volume 2013-15 (M€)
Ecommerce
Fintech
eGovernance
Security
Marketing
Communications
Employment
Gaming
Data
Lifestyle
€0 €100 €200 €300 €400

12. FOREIGN INVESTORS NOT ONLY COME FOR THE SUN
Growth capital mostly provided by international investors
• Most ever: 44 VCs
• Fueling growth: 73% of
all capital invested in
2015
• Only one round of
€10m+ (Jobandtalent)
with no participation of
foreign VCs
In what type of rounds did foreign VCs
participate in in 2015?
17 %
13 %
19 %
15 %
35 %
€1 to €5m
€6 to €10m
€11 to €15m
€16 to €20m
€20+m
Source: Novobrief

13. FOREIGN CAPITAL: 3 MAIN SECTORS
International investors mostly invested in these sectors
Wallapop, Letgo, Fever
• Accel Partners
• Fidelity Growth
Partners Europe
• Northzone VC
• 14W
• Insight VP
• Naspers Limited
Kantox, Novicap,
peerTransfer, Digital
Origin
• Bain Capital
• Spark Capital
• Partech Ventures
• IdInvest Partners
• Techstars Ventures
• Tekton Ventures
• QED
• Devonshire Investors
• Accel Partners
CartoDB, Typeform,
Userzoom
• Earlybird VC
• Accel Partners
• Index Ventures
• Salesforce
• PNC
• RTA Ventures
• TC Growth
Partners
• StepStone
Group
Mobile marketplaces Fintech ‘Pure software’

14. BARCELONA
TECH HUB

15. A DIGITAL COUNTRY
Barcelona drives Catalonia’s digital economy
• 10,700 ICT companies
• 73,000 employees
• €14.5b in turnover (1/5 of
Spain)
• €214m in R&D
• Barcelona startups:
• Revenue: €6b
• Workforce: 9,500
• International activity:
60% are active abroad
Source: Barcelona Activa (early 2015) & BCN Tech City survey

16. A DIGITAL COUNTRY
Barcelona’s startup ecosystem
Source: BCN Tech City / Startupxplore
Young:
4.8 years
Market:
41% B2B
26% B2C
33% B2B2C
Sectors:
13% media
12% mobile
11% enterprise
6% marketing
Funding:
52% have received investment from
business angels
33% went through an accelerator
International:
60% active outside of
Spain, in more than 50
countries

17. A DIGITAL COUNTRY
Education + entrepreneurs + funding + public
institutions/coworkings = success
Education
Funding

18. A DIGITAL COUNTRY
Barcelona’s ecommerce & mobile economy
Source: Startupxplore
Most common type of startup in
Barcelona (as % of total market)
Ecommerce
Mobile
Enterprise
Marketing
Other
Travel
Communications
Health
Consumer web
Media
Education
Sports
Gaming
Software
0.0 % 3.5 % 7.0 % 10.5 % 14.0 %
Ecommerce
13.4%
Mobile
12.8%
Enterprise
10.8%
Marketing
6.2%
Travel
5.9%
Comms
5.7%
Health
5.2%

19. BARCELONA DOMINATES STARTUP INVESTMENTS
60% of all euros invested in 2015 went to Barcelona-based
startups*
€0
€175
€350
€525
€700
Barcelona* Madrid Valencia
19.7
165
324
2011
2013
2014
2015
Source: Webcapitalriesgo, Novobrief
* Barcelona and rest of Catalonia

20. BIGGEST ROUNDS IN BARCELONA
Explosive growth
Source: Webcapitalriesgo, Novobrief
Largest investment rounds in 2015 (€m)*
Letgo
Wallapop
UserZoom
Digital Origin
Typeform
Kantox
Softonic
Deporvillage
Loanbook
Marfeel
0 25 50 75 100
€3
€3
€4
€6
€10
€13
€15
€30
€40
€92
• €264m invested in Barcelona
startups
• Hypergrowth: +96% YoY
• 92% of all capital invested
inall of Spain in 2014 (€285m)
*This analysis includes Wallapop’s widely reported,
but not officially confirmed, $100 million round

21. CATALONIA’S TOP SECTORS
Mobile classifieds, ecommerce & fintech
Source: Webcapitalriesgo, Novobrief
Startup sectors that attracted more investment in
2015
13 %
3 %
10 %
13 %
61 %
Ecommerce ‘Pure software’ Fintech Health Other
• Wallapop, Letgo & other
ecommerce/classifieds
startups lead the way
• Enterprise technology
represented by UserZoom,
Typeform, comes in second
• Fintech (payments - Digital
Origin, FX - Kantox) third
• 5 investment rounds of €1m+
for health startups

22. INCREASING M&A ACTIVITY
Creating wealth through exits
Trovit Akamon La Nevera Roja*
Founded in… 2006 2011 2011
Number of years
to exit
8 4 3
Selling price €80m €25 €80m
Rounds of funding
1
(€150,000)
3+
(€2.8m)
3+
(€10m)
Revenue in last
full fiscal year
before exit
€17.5m (2013) €15m (2014)
€2m
(€40m in reported
restaurant sales)
EBITDA in same
period
€6.2m €800K (profit)
Undisclosed
(not profitable)
Revenue multiple
paid by acquirer
4.5X 1.6X 40X
Employees 92 ~ 100 ~ 40
Stake (%) of
founders at time
of exit
~ 90% ~ 78% ~ 30%
Founder earnings €72m €19.5m €24m
Investor earnings €8m (57X) €5.2m €48m
Significant exits in recent years:
• Key to spark entrepreneurship, new
startups and redistribution of
wealth
• More than $155 million in exits in
past two years
• Recent exits:
• Trovit (Next Co): €80m
• bodas.net (Weddingwire)
• Akamon (Imperus): €25m
• Icebergs (Pinterest)
• Ducksboard (New Relic)
• Nubera (Gartner)
Source: Novobrief
*Madrid-based

24. EUROPEAN CONTEXT
Very small VC per capita
VC investments per capita 2014 (€)
€0
€100
€200
€300
€400
Israel USA UK Spain
625
141
371 • Spain: more investments
and money than ever
• In other main tech hubs in
2015…
• US: €50b+
• UK: €4.5b
• Germany: €2.4b
• Israel: €1.6b
• France: €1.5b
• Spain: €0.5b
Source: Pablo Ventura, Dealroom, NVCA

25. EUROPEAN CONTEXT
Low density of business angels
Source: Atomico / AngelList
Density of business angels in Europe
London
Paris
Berlin
Helsinki
Moscow
Istanbul
Amsterdam
Stockholm
Munich
Zurich
Dublin
Copenhagen
Vienna
Hamburg
Brussels
Oslo
0 625 1,250 1,875 2,500
BARCELONA
MADRID
Business angels per ,000 people
Helsinki
Zurich
Brussels
London
Amsterdam
Dublin
Paris
Stockholm
Copenhagen
Berlin
Munich
Oslo
Vienna
Hamburg
Moscow
Istanbul
0 0.15 0.3 0.45 0.6
BARCELONA
MADRID
161
0.1
0.05
168

26. EUROPEAN CONTEXT
Spain accounts for small fraction of EU exits & M&A value
M&A deals in Europe (Q1-3 2015)
7 %
93 %
Rest of Europe
Spain
• 7% of all EU deals
• 446 in EU:
• Germany: 88
• UK: 62
• Israel: 50
• Spain: 29
• France: 28
• 6% of all M&A value (€8b)
• Telco-driven
Source: tech.eu

27. EUROPEAN CONTEXT
Limited impact of Spain’s ‘Ley de emprendedores’
• Spanish government approved in 2013 ‘Ley de emprendedores’, an
entrepreneur-friendly law to promote startups and the creation of new
companies
• Its impact has been very limited
• Spanish entrepreneurs and investors continue to face significant challenges:
• High taxes at the early stage for founders
• Exit tax when expanding and changing residency to a non-EU country
• Lack of stock option schemes due to high taxes
• High taxes for business angels

28. CONCLUSIONS
2015: A YEAR TO REMEMBER
Record investment numbers & notable exits:
2015 was a record year for Spain and Barcelona on various fronts: for the first time ever,
Spanish technology companies received investment of more than €500 million, fueled
by the participation of a record number of international investors (44 VC firms) and
producing notable exits such as Trovit, La Nevera Roja or Akamon.
Worldwide category leaders:
Startups such as Wallapop and Letgo -both based in Barcelona- have become category
leaders in the mobile classifieds sector, becoming the two most well funded startups in
the world to try to conquer the US market.
Scytl, born in 2002 and the most successful spin-off in the technology history of Spain,
has also consolidated its position as the leading eGovernment company in the world
and plans to IPO on the Nasdaq in 2017.
Things can, and should, get better:
Investment per capita in Spain represents a small fraction compared to other European
countries, and so do the number of startup exits or business angels. This, coupled with
unfriendly laws for entrepreneurs and investors (exit tax, no stock options and high
taxation of business angels’ activity), pose a strong challenge for the development of
the country’s technology ecosystem.

29. THANK YOU

30. All of the charts, tables and figures that are included in this report come from
publicly available sources.
Special thanks to:
METHODOLOGY