València regularly tops the rankings one of the best cities in the world, due to its excellent combination of more than 300 days of sunshine per year, the Mediterranean on your doorstep and a lifestyle that values leisure, exercise and good food. But it’s not all paella and chill.
The startup scene of the Region of Valencia – mainly in the capital and in the smaller towns of Alicante and Castellon – has grown rapidly in recent years and is now making a name for itself in everything from AI, fintech and cybersecurity to cleantech, healthcare technology and industrial IoT.
With the first TNW conference in València around the cornerwe’ve rounded up a list of the leading figures in the local tech scene who have contributed to the growth of the ecosystem over the past decade. Our goal was to get their take on where Valencia’s tech scene is today, what it has to offer and the challenges ahead.
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The heart of technology comes to the heart of the Mediterranean
“I always say we’re going through puberty” Javier Megiasmanaging partner of the EMEA VC fund of Plug and Play Tech Center in Valencia, said TNW. “This is a really important moment where you create your beliefs and the foundations of your life.
“Everything is going to accelerate quite a bit in the next few years. We are at the tipping point of ecosystem change, from a regional, fairly local ecosystem to something much more ambitious – and much faster.”
Valencia in numbers
Data shows a tech hub is on the rise. According to Bankinter Foundation’s Startups Observatory, investment in Valencia-based startups increased from €58.5 million in 2021 to €73 million in 2022. Ecosystem tracking platform Dealroom reports that the Region of Valencia has the highest number of startups per capita in Spain.
research of Start Valencia noted that the number of registered startups in the region increased from 1,012 in 2021 to 1,212 in 2022; Dealroom, on the other hand, has an even higher estimate of over 1,500 startups.
València’s Fever recently raised $227 million (€212.6 million) in a funding round – the largest sum of funds raised by a live entertainment startup. Credit: Fever
València still has little to do with unicorns, but can point to Flywire, the global payments provider (now headquartered in Boston), which became the first Spanish startup to go public on the Nasdaq in 2021, and live entertainment platform Fever, the most recent year became a unicorn . Other notable success stories include Jeff, Climate Trade, Voicemod, Sesame HR, and Sales Layer.
The investor scene tends towards local offices with big names such as Draper B1, Angels Capital, the private angel investor network BiGBAN, Demium and GoHub Ventures, and Global Omnium, the fourth largest water company in the world. US-based Plug and Play also invests in Valencian startups, including Climate Trade and Zeleros.
The City of Valencia is also a very active participant in the ecosystems, with a number of programs including València Activa, VLC Tech City, Invest in Valenciaand Vit Emprende.
A bottom-up ecosystem
For Plug and Play’s Megias, the biggest difference between Valencia and other startup scenes is the former’s bottom-up ecosystem.
“It was really built and connected by the founders,” he said. “We’re really good at building efficient companies from the ground up and scaling them to, say, Series A – but we face a challenge of really scaling that to the next level and building really big companies like Flywire, for example.” .”
Megais co-founded two startups before joining Plug and Play.
More than 30% of all startups in Valencia are two years old or younger. Almost 30% of all startups there are pre-seed and another 30% are in the seed phase. Almost 10% of them have received Series A funding. Less than 1% have secured Series B funding, the same is true for Series C.
“Valencia’s international community is growing.
According to Megias, Valencia is becoming a magnet for expats. The cheap cost of living and the pleasant, manageable city are big draws, but there are also more international jobs on offer. Serving the EMEA region from central Valencia, the Megias team is made up of 30 different nationalities, all of whom speak English at work.
“There’s an international community that’s growing because big companies like Plug and Play are coming here and attracting them,” said Megias, one of the co-founders of Start Valenciaa non-profit organization that promotes local startups.
One of the key areas for startups in the region is La Marina, which is also the venue for TNW-Valencia. Accelerator Lanzadera, strategic partner of TNW, pioneered the development of a technology strip by the sea.
Founded in 2013 by Joan Roig, the billionaire owner of supermarket chain Mercadona, the Complex today hosts the EMEA Business School, Lanzadera itself and its scale-up Space Angels, the Insomnia Accelerator, Biohub and Sesame. Lanzadera, which operates under the umbrella of the Marina de Empresas entrepreneurial hub, has accelerated over 1,000 startups to date and recently welcomed its first group of over 100 from Portugal.
This year another building on the Tech Strip will open its doors: La Terminal Startup Hub. The website will provide a physical space for startups and scale-ups to interact with each other, companies and investors.
La Terminal will become a new international technology hub for the Valencian business ecosystem.
The speed of change in Valencia is something that Bianka DragomirTNW València Advisor and CEO of Avaesen, she witnessed firsthand. Their pioneering cleantech cluster in the region consists of 300 public and private stakeholders, 160 of which are companies in the fields of renewable energy, water cycle and waste management, and smart cities. Since Dragomir took over the first cleantech cluster in Spain in 2013, the organization has accelerated more than 400 startups.
“When you come here, you will be connected immediately.
“València is a very dynamic ecosystem, very diverse, and there are many different industrial sectors that are emerging and traditional sectors that are turning to a new paradigm of sustainability,” Romania-born Dragomir told TNW. “And the beauty of it – every single stakeholder who comes from outside of Valencia says that – is that when you come here you are connected immediately.”
Dragomir is the first woman to be named “Cluster Manager of the Year” by the European Commission.
According to Dragomir, the city’s connectedness has really boosted the cleantech sector, as startups, corporations, local government and eight universities have driven intense collaboration and innovation.
“‘Tech for good’ is very apt to describe what’s happening here and what’s been happening here for years…it’s a very good differentiator,” she added.
Attract big bucks
Juan Vicen BalaguerCo-founder and CMO of Zeleros Hyperloop and advisor to TNW València, sees benefits in the region’s youth.
The Zeleros Hyperloop is based on fully electric pods that are self-powered. Photo credit: Zeleros
Vicén notes that while the Valencian ecosystem is young compared to Paris and Berlin, it has a “freshness” that encourages an open exchange of knowledge and experiences between startups.
“Something that I think the entrepreneurial ecosystem in Valencia has done well is basically the use of space [in the whole tech marina area],” he said. When investors come, they often get a tour of all the accelerators and incubators along the Marina.
However, attracting large investments remains a challenge. “From today, when you think of València, don’t come here to get investments, you come here because you think it’s a good place to start with low interest rates [for renting office space]’ said Vicen.
“We’re very good at bringing new ideas to life, but when it comes to investing, there’s a gap. It’s different in big financial centers like London or Paris where you are in the country’s capital and it makes it much easier to do business.”
Vicen led Zeleros to the “Top Startup” award at the València Startup Awards.
Investment is of course also essential to attracting the best talent – and Spain is not known for high salaries. According to Statista’s data for 2021 average full-time salaries in Europe, Spain ranks 18th on the continent. The Zeleros founders, says Vicén, have been “really transparent” with investors about the need to offer salaries that are competitive with those in northern European countries.
“Once we have these co-founders, everything will be much faster.
Plug and Play’s Megias agrees, noting that Valencian companies need to “step up” their game on the salary front, but to do so they need to network with top investors in Europe. As in many European ecosystems, the second generation of founders and employees who stay and either invest or create new startups will be crucial for the maturing of the technology sector in Valencia.
“Once we have these second founders who already have the connections, everything will be much, much faster,” Megias said.
From the point of view of an external observer, English in particular needs to establish itself as the corporate language in scale-ups, which would open up opportunities for international talent and investors. Zeleros, the Plug and Play Tech Center and some other organizations are already doing this. But in general, not much English is spoken here as a matter of course and not all startups have an English version of their websites.
Still, the ecosystem has a bright future ahead of it.
Nacho Mas, CEO of Startup València, predicts that the Valencian community will become one of the Top 10 tech hubs worldwide.
“Even though we’re smaller than Madrid, we’re experiencing faster growth… and we still have room for more,” Mas told TNW.
“All members of our community work towards a common goal, which gives us a significant advantage,” he added.
According to Mas, La Terminal will house more than 500 high-skilled jobs.
Mas noted that the La Terminal project in the Marina, where TNW València will take place, is expected to help attract more investment, talent and projects to the ecosystem.
“We are ambitious because we have the potential and the resources to be successful,” he said.
Whether it will end up being one of the top 10 global tech hubs remains to be seen, but València is definitely mastering its youth. If it can attract large investments in the future, the region’s startup sector is likely to explode.
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