Spain’s start-ups topped €3bn in VC funding in 2025, analysis says

Spanish start-ups raised more than €3bn in venture capital in 2025, the third year they have crossed that threshold after 2021 and 2022, according to an analysis by Neil Martin published on Finextra. Martin said Spain ranked second in Europe by VC funding growth rate last year and now has a tech ecosystem valued at €125bn.

The figures point to a broader shift in European venture funding, where Spain remains smaller than the UK, Germany and France but is gaining scale. Martin placed Spain as the eighth-largest technology ecosystem in Europe, compared with the UK at €1.3tn, Germany at €504bn and France at €483bn in enterprise value.

Martin said Spanish start-ups have expanded 2.3 times since 2020. Of the country’s €125bn enterprise value, about half was created by companies founded since 2015. Private companies accounted for €67bn, acquired businesses for €48bn and listed technology groups for €10bn, according to the analysis.

Funding was concentrated in the country’s two largest technology centres. Madrid and Barcelona together generated more than two-thirds of venture capital raised in Spain in 2025, Martin said. Barcelona ranked 59th globally in the analysis, while other cities including Valencia, Bilbao, Malaga and San Sebastián showed strength in early and breakout-stage financing.

Early and breakout-stage funding has roughly returned to its 2021 high, according to Martin. Late-stage investment remained well below the levels reached in 2021 and 2022, which he attributed mainly to the absence of mega-rounds above €250mn. Late-stage funding totalled €783mn in 2025, compared with €1.9bn in 2021 and €1.4bn in 2022.

Artificial intelligence attracted the largest amount of sector funding in Spain in 2025, drawing €717mn, Martin said. He added that nearly one in five start-ups founded in Spain since 2021 is an AI company, and that Madrid and Barcelona have become leading European centres for AI researchers and technology talent, competing with cities including London and Paris.

Martin also pointed to a stronger founder base as a factor in Spain’s development. He cited former employees of Spanish unicorns including Glovo, Cabify and Job&Talent who have gone on to create new companies, and said founders with experience inside high-growth businesses often build faster-scaling ventures.

The financing infrastructure around the sector has also matured, according to the analysis. Martin identified BBVA Spark, which serves technology companies, and Kfund, which backs businesses in Southern Europe and Latin America, as examples of specialist capital providers. He also cited Spain’s Startups Law and the certification role of Enisa as contributors to a more favourable legal and fiscal setting for innovation.

Spain’s constraints remain material. Martin said the country trails peer ecosystems in the progression from seed funding to Series A, with 19% of start-ups making that transition, against 31% in Germany, 27% in the UK and a European average of 23%.

Deep tech creation has also weakened on one measure. Martin said the share of deep tech start-ups founded in Spain since 2021 was 5.1 percentage points lower than during the 2010 to 2020 period. He also noted that many companies founded in Spain move their headquarters abroad while retaining business-critical links to the country, a pattern that can reduce the domestic concentration of senior corporate infrastructure.

Martin concluded that Spain has entered a more consolidated phase, supported by technical talent, AI activity and specialist capital, while still facing gaps in later-stage funding and scale-up conversion.

This story draws on original reporting from Finextra Research.