Madrid or Barcelona: which startup ecosystem would you choose?

According to several of last year’s startup reports, the startup ecosystem in Spain has shown continuous growth, and trends indicate this will not stop anytime soon. Investment opportunities, talents, innovation hubs, coworking spaces, startups and incentive programmes create a great ecosystem to keep an eye on in Spain.

Recently the fDi Intelligence published the Tech cities of the Future 2020/21 ranking, showing Barcelona as the 8th and Madrid as the 11th cities most promising for emerging companies. In our 2018 ranking of the top 15 startup hubs in Europe, we placed Barcelona as 5th, and Madrid as 6th. 

Such rankings and reports measure the economic potential, innovation attractiveness, cost-effectiveness, startup environment, investment in talent, and amount of emerging companies. So when comparing Madrid and Barcelona’s startup ecosystem it’s important to pay attention to these variables.

Madrid

The startup ecosystem here has grown considerably in the last few years, seeing more initiatives that promote the gathering of investors, companies, universities and citizens to participate in the development of innovative projects, as well as bigger investments being made into emerging companies.

This city enjoys a proximity to power, with the capital offering lobbying opportunities, institutional strengths, and also being a centre for decision making. For this reason it’s clear why multinational, technological, and telecommunications sector companies choose Madrid for their headquarters. In addition, Madrid dedicates a big chunk of financial power and many emerging companies develop innovative services towards the fintech sector, making it attractive for startups in this market. 

According to Dealroom, between 2015 and 2019, Madrid’s emerging companies raised €1.530 million.

The presence of great coworking spaces, innovation hubs, investment opportunities, and the Arganzuela district being a place for innovation to happen, blended with a very livable and enjoyable city make an amazing recipe for attracting emerging companies and innovators to develop their projects there.

Barcelona

This city has been a long time favourite for many innovators and creators who are seeking to exploit their creativity, benefit from inspiring sceneries, and enjoy the coast. There is no surprise there are several coworking spaces that fit everyone’s needs, as well as the @22 district, an area filled with hubs that support innovation and entrepreneurship, which is also supported by the local government.

According to Dealroom, Barcelona’s startups raised €2.748 million in investments between 2015 and 2019, almost doubling Madrid’s figure. It is clear, then, that Barcelona-based startups tend to receive much more attention from investors, founders, companies, and also from employees; perhaps the sea is a great influential factor making the city really attractive to sea lovers who enjoy working and creating in a beach city.

A great mix of a mature ecosystem, an easy living city, technical and emerging companies supported by great infrastructure, and the beach, make Barcelona an attractive city for a growing startup ecosystem.

The rankings show Barcelona ahead of Madrid regarding the development of the startup ecosystem, but the advantage Barcelona shows is not that big, and Madrid could close the gap in the coming years .

Although identifying the right physical ecosystem to develop your project is important and choosing your headquarters will determine several constraints for your business, the recent coronavirus pandemic has shown us that thanks to technologies, location is becoming less of an important factor for working on your projects. As time goes on, borders and location limits will continue to be thrown down, giving everyone the possibility to contribute and develop their innovations without needing to be in one specific place.