Madrid has become a benchmark for the entrepreneurial ecosystem in Spain, with a network of fully mature startups and an accelerated growth structure. According to the Entrepreneurship Map 2024, prepared by South Summit and IE University, 24% of Madrid startups are now over five years old, while 21% have become ‘scaleups’, figures that place the Community of Madrid above the national average in longevity and scalability. In addition, the Madrid business model stands out for its focus on solutions for companies (B2B) and a boost to hiring: 64% of startups plan to expand their workforce in the next year, compared to 60% at the national level.
According to Salvador Aragón, CIO of IE University, Madrid has a solid entrepreneurial ecosystem that stands out “for its focus on high-tech sectors such as software development, fintech and health. Their B2B model and diversified revenue system, with a significant weight of subscriptions, position Madrid startups as key suppliers for other companies. In addition, the city attracts experienced talent, with 64% of serial entrepreneurs, a figure higher than the national average. However, Aragón considers that “it would be important to promote greater sectoral diversity and promote female participation in the ecosystem.”
From the general directorate of entrepreneurship of the delegate area of innovation and entrepreneurship of the city council, they tell ABC that Madrid is presented as an ideal environment for entrepreneurship, with 36% of the population perceiving business opportunities, above the national average of 31%. , according to the GEM Report 2023-2024. Through Madrid Emprende, the council supports SMEs with incubators, coworking, advice, training and access to investors through Investment Forums. In addition, the Entrepreneur’s Single Window facilitates the creation of companies and promotes social and female entrepreneurship, reinforcing the city’s attractiveness to develop projects in a collaborative environment.
Epicenter
To understand the entrepreneurial ecosystem of Madrid, La Nave is one of the key places. Since 2018, more than 400 companies have gone through its programs, and every year around 70 startups benefit from incubation, acceleration initiatives and special programs such as ’empowerment’ for women entrepreneurs, according to Azucena Elbaile, the center’s director. By joining the La Nave community, entrepreneurs have access to continuous networking services, media visibility and contact with investors, he says. Among its success stories are Sepiia, which has raised more than three million euros, and Ailin.health, awarded this year as Entrepreneur of Madrid.
Joe Haslam, professor and executive director of the Owners Scaleup program at IE Business School, highlights that “Madrid attracts entrepreneurs from all over the world, many of whom have no previous connections with Spain. The city offers an international lifestyle that makes it especially attractive, similar to Malaga. Haslam points out that there are no big differences between entrepreneurs in Madrid and other parts of Spain; Entrepreneurs often share common traits regardless of their location. In Madrid, furthermore, “many residents have ties to other places, which reinforces its cosmopolitan atmosphere,” he adds.
Experts call for tax incentives to boost risk investment and move to the next level
Greater ambition
Nacho Ormeño, CEO of Startupxplore, highlights that startups in Madrid are distinguished by “greater ambition, less risk aversion and greater access to capital compared to the rest of Spain.” In the country there are three speeds: Madrid and Barcelona lead, followed by Valencia, Bilbao and Seville, and finally other regions with less access to investment and specialized support, says Ormeño.
One of Madrid’s challenges is the difficulty of attracting talent in the face of competition from large corporations and other startups. Elbaile, from La Nave, highlights that, “despite this challenge, the city is consolidating itself as a key destination thanks to its solid entrepreneurial ecosystem.” With incubators, accelerators and innovation centers that facilitate access to financing and connect startups with investors, Madrid is positioned as a leader in emerging ecosystems, according to the Global Startup Ecosystem Report 2024.
According to the Entrepreneurship Map, 49% of Spanish startups are financed with their own resources, 5% more than in 2023, while 29% resort to private investment. Financing continues to be one of the greatest needs for startups in Spain and Europe, driving many to capitals to access funds and opportunities. Elbaile emphasizes that being in Madrid offers unique advantages, such as proximity to Ibex companies for B2B businesses and access to financing in a consolidated ecosystem. «Being in a consolidated ecosystem like that of this city offers financing opportunities that others do not have, without forgetting that there is this difficulty at a general level in Spain to access financing from Series B rounds. Although the ecosystem in Madrid continues to evolve As it is doing so far, that ‘gap’ will also be covered,” he assures.
still far away
When comparing the Madrid ecosystem with other more mature ones such as London or Berlin, Nacho Ormeño considers that Spain lacks the conviction to compete at that level. Venture capital investment remains low by historical standards, and limited financial education reduces risk appetite, especially in the corporate sector. Ormeño highlights the need for “tax incentives for investment in equity”, suggesting that they be extended to all companies, not just those authorized by Enisa, and that insurers and pension funds be allowed to invest in illiquid assets. Without a clear commitment to national entrepreneurs, he warns, Spain will be relegated in the European ecosystem.
To face these challenges, initiatives such as the Móstoles Impact Entrepreneurship Booster (Mieb) promote entrepreneurship in the south of Madrid, turning it into a generator of competitive startups. Mieb, an initiative of the Móstoles City Council, takes advantage of the large population and diversity of the area to facilitate the testing of scalable projects. José Correa Pernas, CEO of SustainableStartup&Co and director of Mieb, highlights that the region has infrastructure, universities and affordable housing, ideal for product validation. “Connecting startups with local companies allows them to accelerate their arrival to the market, which is attractive for investors looking for projects with European potential,” he says.
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