Reinventing Growth in a Mature Market

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The Spanish entrepreneurial ecosystem has reached a point of maturity, but its growth model is showing signs of fatigue. Spanish startups now have an average age of 3.19 years, slightly up from 3.12 years in 2023. Moreover, 20% of these startups have progressed into scaleups, reflecting a 3% increase from the previous year, showcasing their growing maturity.

However, this report highlights the challenges facing the sector. The financial outlook remains stagnant, with only 18% of startups reporting a positive EBITDA in 2024, a figure that has remained unchanged since 2017. Furthermore, since 2018, only 30% of startups have consistently reported annual revenues exceeding €150,000, indicating little progress in revenue generation. This stagnation is further evident in the limited growth of startups earning more than €500,000, a percentage that has remained stuck at 10%.

The Shrinking Hiring Outlook

Another concerning trend is the declining hiring expectations. While 60% of startups expect to expand their teams soon, this number has steadily dropped from 76% in 2021. This shift suggests that startups are becoming more cautious in their growth strategies amid economic uncertainty.

The Path to Reinvention: AI and Emerging Technologies

To combat these challenges, the Spanish startup ecosystem is looking to new technologies and sectors for growth, with artificial intelligence (AI) leading the charge. Currently, 30% of startups use AI, marking a significant 10-point increase from 2022. While this is a promising development, Spain still lags regions like North America, where AI adoption among startups is closer to 40%.

According to María Benjumea, our president and founder, the way forward lies in exploring new areas of innovation and identifying untapped opportunities. As she explains, “We need to focus on areas where we haven’t yet realized our full potential for innovation. By doing so, we can drive entrepreneurship in strategic sectors and stimulate the Spanish economy.”

The Spanish Entrepreneur: A Consistent Profile

Despite the evolving landscape, the profile of the typical Spanish entrepreneur remains unchanged. The majority—80%—are men with an average age of 38. They are highly educated, with nearly 100% holding a university degree, and 63% of them supplementing this with a master’s degree. Furthermore, 17% hold a PhD, surpassing the North American average but slightly trailing Europe by four points.

Serial entrepreneurship is also a key characteristic of the Spanish ecosystem, with 58% of founders having started more than one venture. However, a notable gender gap persists, with only 38% of female founders identifying as serial entrepreneurs compared to 63% of male founders.

Key Sectors: Healthcare, Fintech, and Green Business

In terms of sectors, Healthcare and Fintech continue to dominate the Spanish startup scene. Healthcare startups boast longevity, with an average age of 4-5 years, while Fintech ventures tend to be younger, with an average age of 1-3 years. Green Business has also gained traction, consolidating its position as the fourth most represented sector in 2024.

In terms of employment, most Spanish startups (70%) employ between 2 to 10 people, a slight increase from 2023. Meanwhile, the proportion of startups founded solely by women has risen from 6% in 2022 to 10% in 2024, while mixed gender founding teams have declined from 35% to 31%.

Intellectual Property and Funding: Room for Improvement

Startups in Spain are increasingly prioritizing intellectual property protection. In 2024, 20% of startups reported having developed patents, up from 15% in 2023. However, Spain still trails behind regions like North America (30%) and Asia-Pacific (33%).

Regarding funding, self-financing remains the most popular method, rising from 44% in 2023 to 49% in 2024. Meanwhile, private funding has declined by 4% to 29%, and public funding has decreased from 7% to 5%.

The Untapped Potential of B2G

2024 Entrepreneurship Map also points to the potential of Business-to-Government (B2G) as a growth opportunity. Currently, only 6% of Spanish startups count the government as a client, compared to 11% in Europe and 19% in Asia-Pacific. As Salvador Aragón, Chief Innovation Officer at IE University, notes, the public sector represents a significant opportunity for startups to launch new ventures and innovate.

Conclusion: The Road Ahead for Spanish Startups

As the Spanish startup ecosystem continues to mature, it faces both challenges and opportunities. Stagnant financial performance and reduced hiring expectations highlight the need for reinvention. By embracing emerging technologies like AI and exploring new markets such as B2G, Spanish startups can break free from their current limitations and drive future growth in the national economy.