With coworking spaces and accelerators focused on social innovation, and a growing startup scene, Madrid is set to become a key city in the European GovTech ecosystem.
Despite Spain’s economic struggles since the financial crisis, the country is now recovering at an astonishing rate, partly fueled by its growing startup ecosystem. In 2017, investment in tech startups grew by 45% to €780m. Last year, the EU Commission considered Spain the most improved digital economy in the EU. The two biggest innovation hubs – Madrid and Barcelona – have increasingly attracted talent and capital, thereby boosting the evolving startup scene in the country. Spain is striving to create, in the words of the Prime Minister Pedro Sánchez, a “country of entrepreneurs”.
Even if it is still lagging behind Barcelona, Madrid is set to compete with other European innovation hubs, now being one of the fastest-growing startup scenes in Europe. Madrid is considered the world’s 7th most livable city, and founders move to the city for its sunny days, delicious food, low-cost living and high quality of life. But those are not the only reasons – its status as a gateway to Latin America and the opportunities offered by its expanding and competitive tech industry have been driving startups to base their headquarters there. In fact, Madrid is now home to 1,235 startups, 30% of Spain’s total – and this number is set to keep growing. This innovation ecosystem is supported by a large amount of funding: in 2018 Madrid received $441m, being the 7th European City by capital invested.
Despite government initiatives such as the creation of La Nave – a hub where startups, investors, universities and citizens can collaborate in innovative ideas – bureaucratic barriers to the development of its tech industry are still hard to overcome. For example, opening a bank account can still be a challenge for non-Spanish speakers and setting up a company takes more than 24 hours.
« Yes, Spain does have the potential to become the next ‘startup nation. We’ve already taken the first steps. Just imagine what we could do if the government were not a barrier, but rather an ally. We have to continue working to create an entrepreneurial ecosystem that works in collaboration with all other major economic players. This would lead to reducing social divides, and a country that leaves no one behind. »
But Madrid’s thriving startup scene still has the potential to become a leader in social entrepreneurship. It has created a prosperous environment for startups by hosting 74,792 tech meetups, last year alone and organising events like the South Summit. The city’s district of Arganzuela has become the most dynamic and fast-growing area, where entrepreneurs are supported by a network of accelerators and co-working spaces, such as Impact Hub, SeedRocket, and Google for Startups, with a focus on social innovation and technologies that aim at transforming citizens’ lives. Educational initiatives like KeepCoding and IronHack are also based there, ranking Madrid as the 7th European as measured by number of developers, home to more than 100,000 developers in 2018. New business generation is also supported by national-level public funding schemes powered by ENISA and Avalmadrid, as well as private investors, including Kibo Ventures and JME Venture Capital. These initiatives have helped Madrid climb from 51st place in 2010 to 30th place in 2019 in the World’s Bank Doing Business report, meaning that business processes are becoming more agile and the city more welcoming to entrepreneurs.
Being home to Spain’s first unicorn, Cabify, Madrid’s entrepreneurial ecosystem is set to transform its public services by fostering collaboration between innovators, policymakers and industry leaders.
Top 10 GovTech Startups
Cabify – With the aim of making cities better places to live, Cabify was founded in 2011. The app connects private and business users with the forms of transport that best suit their needs. It is now available in 12 countries, and in more than 90 cities, working with local governments to make cities smarter.
Lingokids – This game-based interactive app teaches English to kids and aims at bringing families together, and improve education through technology. Lingokids just completed a 6M$ investment round in 2018 and received a 1 Million EUR Grant from EU Horizon 2020. Last year, the startup won the award “Business with the Most Social Impact on Education” at the South Summit, in Madrid.
Housers – This crowdfunding platform enables individuals to invest in real estate projects in a transparent way that promotes equal financial opportunities and a safe community. The project is supported by the Spanish Ministry of Industry, Commerce and Tourism.
Buguroo – Buguroo developed the most comprehensive solution for online fraud prevention known as bugFraud, using Deep Learning and Behavioral Biometrics. Their product just won the “2019 Cybersecurity Excellence” Award on Fraud Prevention as well as the CyberSecurity Breakthrough Award as the best anti-fraud solution of 2018 by Gartner.
Tutellus – This P2P EdTech platform based on blockchain pays students for learning in Latin countries. Founded in 2017, the company’s goal is to decrease poverty worldwide through education, letting students earn money, while they study.
#EdTech #Tech4Good #FinTech
Medicsen – Co-funded by the EU, this HealthTech startup launched GlycSen, a device connected to an app designed for intelligent treatment of insulin-dependent diabetes. The app shares patients’ data with their doctors in order to continuously adjust treatment and effectively communicate with them. The team is also developing the first portable needle-free syringe: the SmartPatch.
Spotahome is a mid- to long-term residential rentals platform that is reinventing the property market, saving tenants and property owners time and money. The startup is growing rapidly, fueled by a $40M Series B funding round led by Kleiner Perkins, the first leading Silicon Valley VC investing in a Spanish company. It is present in 11 cities across 8 countries in Europe.
Jobandtalent is a Workforce as a Service (WaaS) platform that integrates the full process of selecting, hiring and managing within a mobile app. The startup aims to make the labour market much more liquid and transparent, helping companies to hire in a more flexible way and with the mission of being part of the reduction of unemployment in the world.
#GovTech #Recruitment #Jobs
This is part of a series selecting the most exciting tech startups from all over Europe. Every week, we cover new countries – check out other European cities here.