There’s no tech pain in Spain: both the number and size of deals have ballooned in 2025, with startups landing chunky offers from big name VCs and founders giddily trading gossip on (still unannounced) future rounds.
VCs pumped just over €1bn into 95 Spanish startups in the first quarter, a 184% increase on the sum raised in the same period last year (€362m), according to Sifted data. There have also been 95 equity rounds and €910m raised so far in Q2, a 90% rise on the amount raised in Q2 2024, with one week still to go in the quarter. The country is fourth for tech funding overall this year in Europe, with a deal count not far behind Germany and France.
“The mentality has completely changed, literally in the last six months: rounds are bigger and faster,” says Borja Solé Fauria, founder of Barcelona-based Murphy AI, which uses AI to modernise debt collecting services. “I’m seeing way more ambition around me.”
“The market’s gotten hotter,” says Jordi Vidal, a partner at Barcelona-based VC firm Kibo Ventures.
He pins this mainly on the global AI gold rush. Europe’s AI industry is centralised in France, the UK, Germany and Sweden but one big Spanish player of note is Multiverse Computing, which has developed technology to compress large-language models, with the hope of making them cheaper and more energy efficient to run. The company, based in northern San Sebastián, a city not normally on VC radars, raised the biggest round in Europe last week, a $215m Series B.
AI is just one part of the Spanish surge, however, with techies also keen to give plaudits to tech-friendly moves by the government and the emergence of so-called mafia founders, the ones with experience in big Spanish companies like Glovo, Cabify and Job&Talent.
“It’s the perfect storm for Spain,” says Kate Cornell, general partner at Acurio Ventures in Madrid. “We were quite behind in startup culture and now are catching up. We’ve got a few big companies that started a decade ago which are now offering that second layer of startups. This has fed into a bigger interest from abroad.”
More buzzy deals are promised, with info fizzing on founder WhatsApp groups about rounds yet to be made official. In the coming months, expect to hear about sizable deals led by VCs including Andreessen Horowitz and Bessemer, among others.
Growing confidence
Nico de Luis, cofounder of Shakers, a site where companies can find freelancers, bagged a €14m Series A in May. “It’s a really strong generation of entrepreneurs we’ve got right now,” he says.
He agrees there’s been a notable mindset shift. “Even five years ago, your family would feel sorry for you for having the startup illness. The goal would be for a French or German company to buy you.”
Shakers’s round was led by Paris-headquartered Partech. “If you get a term sheet from a global fund, suddenly you’ve created FOMO for the Spanish VCs.” De Luis shopped his company to 50 firms overall. “Two told us their LPs [limited partners] weren’t sure about investing in Spain. We can live with just a couple saying this.”
Everyone’s excited to see the big firms circling. Recent deals involving US names in Spain include Barcelona bioinformatics startup Seqera’s $26m Series B, led by New York VC Addition, and HR software player Factorial’s $120m ‘go-to-market’ investment by General Catalyst.
“Spanish founders are reaching out to big investors — which is a sign of a growing confidence in itself — because they want better terms than Spanish VCs offer,” Solé Fauria explains. “Here, the valuation for a pre-seed company might be €3m, whereas in London it could be €10m. That gap is starting to close.”
More than half of all fundraising deals in Spain last year had at least one foreign investor, according to Carlos Trenchs, cofounder of Barcelona angel fund Masia Ventures. “General Catalyst, SeedCamp: it used to be just one deal a year for these types of funds, now you’re seeing multiple,” Trenchs says. What does he think has changed? “There are a lot more second and third time founders around: I’d say this is the main factor.”
More foreign VCs will mean extra competition for local firms — but that’s okay, says Vidal. “We will lose deals at some point but this is an industry that’s also very collaborative.”
Cornell says she’s also happy for foreign funds to “make her up her game”. But she has a deeper question about the Spanish surge: “Is something truly shifting? Or are we seeing the consequence of huge funds needing to deploy their money?
“I just wonder if this growth is sticky, because some of the valuations I find quite terrifying. There are not that many companies, after all, that’ve gone the distance in Spain.”
‘Happy to be the next big thing’
Barcelona-based Rever, which came second in a recent Sifted ranking of the fastest-growing southern European companies, wants to be the next big Spanish export.
The company aims to make the handling of returns smoother for e-commerce sites. “I previously worked at Glovo and I saw that all parts of e-commerce were working well except one: returns,” says 25 year old cofounder Màrius Montmany. “They’re slow, they’re messy, they can take up to three weeks to process.”
Rever promises to prevent some returns before they happen. “We gather valuable data for companies; for example, we could tell a clothing company that one t-shirt is being returned a lot in Germany and that they should proactively order different sizes,” Montmany says. The company works with 500 merchants and transacts returns globally.
Montmany and cofounder Oriol Hernandez i Fajula started the company in 2022 after a stint at the Y Combinator accelerator. “Entering YC changes how you’re perceived: You go from being a Spanish company to being a YC company,” Montmany says.
He wants to see more Spanish-born, global-sized companies. “We have two or three role models in Spain, we don’t have 25.” Glovo founder Oscar Pierre is someone he admires (he’s also a Rever investor). “We all need to be motivated by success stories and I’m happy to be the next one,” Montmany says.
Government steps up
The government, despite currently battling corruption scandals that may force an early election, is receiving some credit for helping to stir the tech scene. Investors say it has courted foreign investment, particularly pharma companies, with some of Europe’s most generous tax breaks and a relatively speedy regulatory process for new drugs. Other tech-friendly efforts in recent times include a startup visa and digital nomad programme.
The influx of pharma companies means that medtech may increasingly define Spain’s tech scene, says Trenchs. “Keep an eye on AI and life sciences, something big could happen here,” he says, noting the progress of Seqera. Spain doesn’t have many startups that fit into Europe’s other high growth category, defence, but there’s a new €150m defence-focused fund, Hyperion, launched by former politician Pablo Casado.
Some investors also speak about the importance of new state vehicle SETT, deployed last year with an initial €20bn, which was one of the backers in the Multiverse deal. “Keeping this tech in Spain was seen as strategically vital and something that will pay off in the future,” says Vidal.
De Luis also points to the influence of the state bank Enisa, which offers loans to startups. “They’re not asking for collateral like a normal bank would and you can get pretty good terms,” he says. Other institutions are stepping up. The Barcelona Supercomputing Centre is expected to spin out five companies this year, says Trenchs. “Previously it was one company a year from these guys.”
Vidal rates other startup efforts like tweaks to tech share options. “This used to be a nightmare, it has improved a bit,” he says. There are good tax breaks for employees moving to Spain, he says, including the so-called Beckham law, named after ex-England captain David Beckham, that allows foreigners to pay a lower income tax rate for a fixed period.
“For workers, Spain’s fantastic. But for wealthy people, maybe not so much,” says Trenchs. “If you had a nice exit in another country, you may be taxed for it when you move here.” The super wealthy keep a lot of their money in neighbouring Andorra or further afield in Switzerland, Vidal notes.
Home to non-hustlers, too
Speak to young Spanish founders and one thing quickly stands out: they have the work-crazy-hours mentality that’s seen a resurgence in tech circles this year. It was after 7pm when Sifted chatted to Solé Fauria, while the chat with Montmany took place at 6pm on a Friday. Both founders headed back to their desks after the meetings ended.
But Spain is also for those who want to slow down a bit. US entrepreneur Ashley Duque Kienzle worked at a string of tech companies in New York, San Francisco and London before settling in Barcelona. Overall, she loves her new work-life balance, even if the after-work calendar is a lot less full than it was previously.
“I would have two events a night to choose between in London. But that’s fine, I don’t want to go to as many things these days anyway. I don’t want to be 20 and hustling. People choose to live here because it has a slightly slower pace. I want to walk my dogs in the mornings and evenings: I don’t want all the rush.”
Kienzle reels off a list of familiar attributes. In her experience, “Spanish people are very well rounded; I love the friendliness of my neighbours. My parents live here now, too, three floors above me. How Spanish is that?”
Read the orginal article: https://sifted.eu/articles/why-spanish-tech-is-sizzling/
