October 20, 2023

Spain’s VC resilience to global slump exposes shortage of later-stage capital

Spain must make it easier for institutional investors to back scaleups, founders say

Spain’s venture capital ecosystem has proven less vulnerable to the global slump in 2022, but a new report warns this might not be good news. 

Spain has a larger proportion of early-stage startups than other tech ecosystems. This means the country’s startups have not experienced valuation cuts and funding freezes of the magnitude seen by startups in other advanced European economies amid the global tech slowdown, according to a report by Spanish founder network Endeavor. 

Later-stage companies around the world have seen their valuations cut as global stocks have come down from 2021 highs, as investors usually calibrate more mature companies to listed tech company prices. 


Endeavor’s report is based on more than 40 interviews with founders, investors and experts.

The number of exits in Spain fell by less than 7% between 2022 and 2023, much less than in Germany and the UK, where it plummeted by 32% and 18%, respectively. Meanwhile, valuations at early-stage companies faced less pressure than those of public or growth-to-late stage private companies. 

So while things look brighter for Spain right now, long term, Endeavor warns that the lack of Spain-based growth-stage investors is holding back the country’s startups.

“If this does not change, the Spanish ecosystem will not experience the virtuous cycle that emerges from the reinvestment of capital and talent from local success stories,” the report says.

This is not just a Spanish issue — investors across Europe have bemoaned a lack of local growth capital. The European Investment Fund, the region’s most prolific VC investor, is trying to encourage the creation of larger funds through its Scale-up Initiative

Hooked by foreign capital 

Only 9% in Spain were growth or later stage, versus 16% and 21% in France and Germany, respectively, according to the group’s research.

International capital remains essential, Endeavor says, especially when it comes to Series B onwards; four out of every five investors in Spain’s largest exits since 2018 — including the likes of Idealista, Wallbox and Glovo — were not based in the country.

Endeavor argues Spanish VC investors seem to struggle to take on larger rounds, pointing out that 90% of the 20 VCs surveyed in 2023 for its research felt positively about the state of VC in the country, but less than 5% reported shifting their stage focus to later-stage companies.

Institutional investors like pension funds and insurance companies are less engaged in VC in Spain than in other big European economies, says Endeavor. The report cites PitchBook data showing there are only 40 institutional investors in Spain with at least $100m of assets under management, versus 134 in France.

Cristina Gallardo

Cristina Gallardo is a senior reporter at Sifted based in Madrid. She covers tech sovereignty and Iberia. Follow her on X and LinkedIn