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Barcelona: The past, present and future of a European startup hub

Barcelona is a place that captivates, inspires and has a mystic, inexplicable quality. The city, whilst famous for beautiful architecture, feel-good fun, and rich cultural heritage, is also incredibly resilient. This resilience is something the Catalan population wears with pride – they’re not shy from challenges and are prepared to keep getting back up after being knocked down. 

Barcelona isn’t some idyllic fairytale place though, and does have a few challenges to surmount. From political tensions to societal clashes, it’s a hot spot of lively discussion and debate. Further, while it’s one of Spain’s biggest, most economically active cities, it’s not the capital of the country, and in the minds of some entrepreneurs and actors in the startup ecosystem, this has its drawbacks.

We love Barcelona. It’s the home to our flagship event, EU-Startups Summit, the host to FutureTravel Summit, the city our office and core team wakes up to every day, and it usually ranks number 5 in our annual ranking of Europe’s most active startup hubs. It’s swiftly become a favourite in the European startup ecosystem too, celebrated with abundant funding, exciting developments and sexy innovation. Recently we took a look at Barcelona’s startup ecosystem in comparison with Madrid. The city also featured heavily in our co-working list, with hubs like OneCowork, Cloudworks and Betahaus all standing out. According to a survey of “Startup Heatmap Europe”, Barcelona is the 3rd most popular city among startup founders when asked the hypothetical question on where they would love to start/grow their company if they could choose freely among European cities.

Barcelona is producing exciting startups across a multitude of verticals, nurturing them from early-stage right up to unicorn heights. From the likes of Glovo and TravelPerk to Wallbox and Typeform, Barcelona has been rightly labelled as a “unicorn territory” and is home to over 1,800 startups. Check out 10 Barcelona-based early-stage startups we have our eyes on here. Looking at the figures, the VC money invested has been growing, with total funding rising to €1.6 billion so far this year – a massive increase compared to €514 million raised in 2020. 

With an increasingly metropolitan community, made up of highly skilled locals, an international community of digital nomads and young professionals, alongside an incredibly attractive lifestyle, Barcelona is somewhat of a heaven on earth for startups and naturally harvests the best of startup culture. Not only does the city play host to our annual EU-Startups Summit, but it’s also home to the Mobile World Congress and some of Europe’s most influential incubators, investors and accelerators have set up roots in Barcelona. 

Recently, to explore how Barcelona has developed into a thriving hive of innovation, we had an insightful conversation with Bernat Farrero (CEO of itnig, host of a podcast, and co-founder of some of Barcelona’s big success stories like new-unicorn Factorial) and Àlex Rodríguez Bacardit (CEO @ MarsBased & Startup Grind Barcelona). 

The Past

The making of a startup hub

Whilst we are now firmly immersed in a startup world, and the word startup is a household name, it hasn’t always been that way. In fact, startups are rather new in the grand scheme of things. They represent a new era of business – defined by dynamism, disruption and a daring attempt to challenge the status quo. 

For Barcelona, becoming accepting of startups and startup culture has been an unfolding series of events over the past 10 years and now, according to both Bernat and Àlex, for Barcelona’s business scene, startups are the norm, rather than the exception. 

References and inspiration

To Bernat, one thing that defines the early stages of building a startup ecosystem is having references. Any city can have investment opportunities, can have content, but, without frames of references, and examples to aspire towards, ecosystems can’t develop. In Barcelona, what has made the difference over the past ten years is the growth and expansion of references, putting Barcelona on the map of startup ecosystems and spreading the buzz about the city. 

“In the past ten years, there’s been more success cases, more evidence, more startups that have grown, more unicorns and more exits. Some people see that others share their experience and their knowledge, and this motivates and inspires young entrepreneurs.”

As Bernat, highlights, the ability to share experiences, give lessons and provide inspiration helps an ecosystem flourish. It’s about seeing what works and what doesn’t, creating a standard for the city. 

Now, Barcelona even has a neighborhood that is becoming characterized by startups – the aptly named Poblenou (New Town in Catalan).  

Bernat stated: “Now, the Poblenou neighbourhood is completely different. Now, the weird ones are the industry players and the startups are the norm.”

Socio-cultural shifts

Àlex also draws on this idea of having an ecosystem based on references – which has contributed to Barcelona’s growth and created foundations for the city’s startup community. Àlex ties this to wider socio-cultural shifts which have happened in the city over the past years, able to reflect on his personal experience of having grown up in the Catalan capital, before working in Silicon Valley and returning to his native hometown. 

“In 2009, no one knew anything about startups. They were called internet businesses back then, not even startups. It wasn’t until about 2011 when the word caught up and since then mentality has changed a lot.” 

With changing mentalities, has come a willingness to accept startups and startup culture – or at least, be open to it. 

We have changed a lot of mentality since the weary days of startup culture here. Back then, startups were perceived as dodgy, unstable. A place where you would work a lot of hours, have bad pay and a lack of security. Definitely not something your family would approve of. The perception was that startups would f**k you up. What Barcelona has done is to flip that perception.”

And what changed that perception? Looking at success stories, having names like Glovo and Wallapop grows. A socio-cultural ability of the city to embrace new ways of thinking and dare to jump on the startup bandwagon. 

The Present

Today, Barcelona is globally recognised as a thriving city. Known for having a rich cultural heritage, a lively culture, a booming tourist scene, and, one of Europe’s most beloved startup hubs. 

Industries like Saas, fintech and ecommerce are growing fast in Barcelona. This year, two new unicorns joined the club (Factorial and TravelPerk) and about €1.6 billion was invested into startups in the city alone. We count that 38 startups exited in 2022. 

People love Barcelona 

Explaining Barcelona’s exciting day-to-day comes directly from understanding the international dynamic the city holds, and in short, that people simply love Barcelona. 

Whether it’s the weather, the food or the lifestyle, Barcelona attracts people from all corners of the earth. People come for vacation, some stay for business and some set up their new life in this city. The ability to attract international talent has meant the city has built up even more references, has been able to shift mindset to a modern, cosmopolitan outlook, and can become a European base for international entrepreneurs and teams. 

Àlex commented: “One of the driving forces is that Barcelona is good at attracting international people. In spite of everything, people want to come to Barcelona.” 

This reputation, this charismatic charm that Barcelona has is what makes it stand apart from other cities today.

“It’s something that doesn’t really happen in other cities, like Madrid for example. There are people who have never even visited Barcelona, or know what country it’s in, but they want to visit, they already count it as one of their favorite cities, as a place to be.” 

And most importantly for startups and business opportunity? International talents are prepared to move to the Catalan capital, set up roots there and use their talent and expertise to grow this ecosystem. Back in 2018, we talked to Lluís Gómez from Barcelona City Council to learn about the government’s view on Barcelona’s startup ecosystem, and how the city can keep attracting international talent.

Àlex: “People are willing to come to work in Barcelona. The international talent working in combination with the local fabric of entrepreneurs and businesses will grow Barcelona.” 

Is Barcelona on a plateau?

While lots can be said about the love for Barcelona, and the stats certainly show positive signs in today’s outlook for startups here, it’s important not to become complacent. A tendency to sugarcoat the situation can be dangerous and according to both Àlex and Bernat is what threatens Barcelona’s startup outlook. 

The startup community is an exciting place to be – but it shouldn’t be taken for granted, and there is still lots of work to be done and challenges to be overcome every single day. 

One way of looking at it that Àlex pointed to is that Barcelona (in the startup world and footballing world), is currently in the Europa League. It wants to get to the Champions, but that requires an ecosystem with strong foundations and lots of support. Being complacent won’t get the team there and nor does overestimating oneself. Influence of the public sector

The public and private sectors naturally have to work together. There has to be an interconnection between these elements of society to keep things ticking over and running smoothly. But, sometimes, things aren’t always so harmonious and certainly, in Barcelona as much as in other cities around Europe, the discussion around the play between governments and startups sparks up lively debate. 

Perhaps the topic is spicier in the wider political context of Barcelona, but, both Àlex and Bernat argued that despite your political outlook or feeling, startups shouldn’t rely on governments to grow and governments shouldn’t impede startups trying to fly. 

Bernat: “There’s a misconception in startups thinking that governments should help them a lot.” 

Àlex: “If your startup fails because the government was moving too slow, the problem wasn’t the government.” 

Startups are inherently about breaking things, about disrupting the status quo. Meanwhile, the government is inherently about keeping things together and steering a steady ship – especially in a society where tensions can get a little high.

The conclusion from our panellists? Governments can help startups by not becoming obstacles – essentially not interfering too much, or ‘staying out of the way’. Startups shouldn’t rely on the government or public sector support, they need to be independent. 

Flying forward 

Given the cautious optimism these thought-leaders have on Barcelona’s startup ecosystem, combined with the fact that we are, on a daily basis, seeing startup success stories coming from the city – what does the future hold? What can the city look forward to? And what is still missing? 

Àlex: “In Barcelona, you can feel this mindset of, ‘I f**king love Barcelona, so I’m going to start a business there.” 

What’s still missing?

In the discussion with Àlex and Bernat, one key element came into focus that could hold Barcelona back in the future: 

Barcelona is a rather small city, compared to other major tech hubs.

The current metro area population of Barcelona in 2022 is about 5.6 million people, with 1.7 million living within the city limits. Madrid stands at about 6.7 million in the metro area and 3.3 million within the city limits. Meanwhile, startup capitals like Paris and London have 12 million and 9 million respectively. 

In terms of numbers alone, this makes Barcelona a much smaller ecosystem and will mean it’ll struggle to compete with these hubs on a statistical level. The city might be smaller, but it is mighty, and this can open up the chance to expand the startup ecosystem outside of the city limits, into other Catalan cities and regional areas. 

Connected to this, is the logistical fact that Barcelona, whilst a globally recognised city and a lot to offer, is not in fact the capital city of a sovereign region. It is Spain’s second-largest city and capital of the Catalan region, but it’s simply not on the same level as a capital like Lisbon or Rome can aspire to be. And, as Àlex passionately argues, is something that will hold Barcelona back in its mission to become a startup hub in Europe. 

Rooted in Resilience

Looking to the future requires knowing the past and present of a city. As we can see, in Barcelona things have changed fast and in the past 10 years, it has undoubtedly become a hub of innovation and startup pandemonium. 

Bernat: “If we tell the stories of businesses that are changing things and we start to explain how to create something good, how to employ people, we create this environment of progress. As a society, we have to highlight the positive impact startups can have, voice these change-makers and shine a light on these people to keep changing perceptions for the better.” 

The city’s unique identity has contributed to this and is what could hold the key for the future. 

Àlex: “We need to become a bigger city, a better city, and more independent. The city matters, people buy into it and will continue to do so.” 

Barcelona, thanks to its resilient mentality, vibrant culture and bold approach to embracing cosmopolitanism and innovation, has been able to develop a strong and thriving startup ecosystem. It’s now ranked highly in Europe, and on the global stage – home to top tech and startup events, innovation hubs and impressive incubators.

A philosophy of trying new things, breaking the mold and welcoming an international lookout is at the heart of Barcelona – and it can help develop an exciting future for startups here.

Patricia Allen
Patricia Allen
is the Head of Content at EU-Startups. With a background in politics, Patricia has a real passion for how shared ideas across communities and cultures can bring new initiatives and innovations for the future. She spends her time bringing you the latest news and updates of startups across Europe, and curating our social media.

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