With Catalonia’s secession looming, Startups have much to fear
Having been two weeks in Spain amidst the high-noon of the Catalan secession ambitions, I had to ask myself what this would mean for startups?
After Brexit, we recently found in our research that 35% of European founders find London less attractive as a startup hub. What would happen to Barcelona’s popularity if they leave Spain and possibly the EU?
I actually was on stage in Madrid last Thursday – launching the findings of the Startup Heatmap Europe study which shows that Barcelona is the 3rd most popular hub for founders in Europe.
Besides that being an awkward moment of silence between me and the Madrid listeners, the audience’s reaction gave a shocking insight in the deep grief the founders in front of me hold about this topic.
With Catalonia’s looming declaration of independence their whole ecosystem trembles.
The Startup Heatmap Europe is a study on how founders move and build connections between startup hubs in Europe. And it highlights the problem of a potential secession:
Europe’s startup ecosystem is based on the many connections between its hubs – and that makes it allergic against secession.
Spain is a net winner from migration of founders in Europe. The Heatmap study with over 1,000 founders in 2016 and 2017 shows a 20% increase of startups through migration in Spain – mostly from Western Europe and Latin America.
Of course, Barcelona is the top hub in Spain, being 3rd overall with 21% of Europe’s founders saying they could imagine to startup there. But also Madrid reaches a notable 12th rank and even gets better rates in access to capital and to talent than Barcelona in our study.
Would this remain the same after Catalonia secedes from Spain and possibly the European Union?
Looking at the in- and outflows of investments, it becomes clear that Barcelona and Madrid could not do without each other.
While Spain is the 6th largest destination for VC investments in Europe by the amount of deals made, 36% of these deals are with outside investors. Thus, the country is highly dependent on this inflow of investments.
Especially, Barcelona does not seem to have a large enough investor base to sustain its status as a top hub in Europe alone (by the way: only 33% of the founders voting for Barcelona are happy with its Access to Capital).
37% of early-stage investments deals made in Barcelona are done by Madrid-based investors. And vice-versa Madrid receives 20% of its investments from Barcelona. The interconnection between Madrid and Barcelona is one of the strongest (if not THE strongest) in Europe.
For the perspective of a founder, the breaking up of these relations between Madrid and Barcelona must seem ludicrous – but unfortunately, it is a real possibility.
Maybe it is time, I think, that also startups speak out on how important a united and strong Europe is for them and become a positive transformative power not only in business, but also in society?
Impact tech enthusiast, ???? Expandtospain.com founder
7 年Thank you Thomas for raising this topic! Living in Stockholm and Valencia, helping digital companies from the Nordics expand to Spain, I have closely followed both hubs in Barcelona and Madrid as the natural choice for opening offices. While hoping that the buzzing startup ecosystem in Barcelona will remain strong regardless, recent events may result in spreading the international investments to more Spanish cities like Valencia with initiatives like Lanzadera.es, with much lower operational costs.
Innovación social digital, agricultura y Radiestesia. Crecimiento y Desarrollo espiritual. Antropólogo y escritor aficionado.
7 年First, My question is: is the current amount of capital raised reasonable? There is a failure of more than 85% startups in spain, maybe this capital decrease helps the future boubble to be less. Second, like a Catalan I voted yes, yes to a lot of things. Never thought to say not at madrid investment and never thought catalan investors say not to a good deal from Madrid. Thanks this big connection between madrid and barcelona we are strong. I dont think It have to be decreased.
Journalist at Disruptores (El Espa?ol). Former journalist at El Punt Avui and L'Econòmic for 39 years. Papers+10 and Dosde2 communication agencies co-founder. womentalentcorner.com founder. Atlas Tecnológico collaborator
7 年You should know that Catalunya, and of course Barcelona, has achieved this good level in startups despite Madrid's commitment to never bet on this city, its airport, or other infrastructure: do you know the history of Mediterranean corridor? Do you know the Madrid proposal on Spanish ports, bearing in mind that Barcelona has the first port of the Mediterranean? You should delve deeper into the economic relations between Catalonia and Spain. With independence, although in the near future there are difficult times ahead, I fear that in the future worse than now we will not be.
Senior Data Scientist at EMD-Batimo
7 年Important similarities with Spain and Canada. As I see on TV the images of passionate people for and against secession of Catalunya, cant stop thinking of the uncertainty created by the 1980 and then 1995 Quebec secession referendums and the huge recessions that followed. Finally 22 years after the last referendum we seem to be getting out of it. I hope whatever our catalan friends decide is their best alternative, their aftermath is better than ours.
System Integration Management of Turnkey Railway Systems (TK)
7 年I was born in Barcelona, and I don't know if Catalonia will be independent or not, but all possible damage has already been done whatever happens, turning a once prosperous region in a wasted land. Barcelona has been aligned for decades with other cosmopolitan cities like Paris, Berlin and others on the front line of commerce, culture, industry and prosperity, being open minded, universal and welcoming. What's left of all that ?