Barcelona: The city for startup companies

Barcelona has always been seen as a top-notch holiday destination; as a dream space for great thinkers and doers; and as one of Europe’s prime “smart city” examples.

But modern times have seen “leading startup hub” also being associated with the city, as startups in Barcelona are increasingly drawing heaps of international talent to its shores.

What makes a city an attractive startup place?

The reasons for creating a start-up company differ depending on person and circumstance, but how is one location chosen over another? Why does one city attract more entrepreneurs, fresh talent, investors and press than another? To find the answer, one has to look at two factors:

  1. the incentives and opportunities offered by the relevant city; and
  2. the encouragement the environment offers to new companies.

It all boils down to a mixture of venture builders, venture capitals, tech events organised in the city, acceptance level by citizens and government, access to capital, etc. However, strong local economy is a crucial factor: numerous studies show that entrepreneurial environments are the result of strong economies to fuel specialised business, not vice versa. Governmental support (such as funding, government sponsorship, public initiatives, technology, etc.) is only possible if the country’s economy can afford it; thus, support is a common factor of all current innovation hubs.

Additional elements that are also vital in the entrepreneurial worlds are low-labour intensity, access to talent, and adequate education facilities.

Barcelona as a startup hub

With a financial crisis leaving half of its youth unemployed, people in Barcelona were forced to become more independent, innovative and creative. Thanks to this wave of fresh talent, small businesses and startups in Barcelona boomed, leading to a surge of co-working spaces and a collaborative spirit that helped the Catalan capital form a tight-knit sense of community – crucial for the success of any business hub.

The result of Barcelona’s bubbling startup sector is evident in the fact that investments in Spanish companies have increased steadily over the past few quarters, pointing to an improved investment ecosystem and a profusion of private- and public capital.

According to Business Insider, Barcelona ranks 4th place in the top tech and innovation hubs in Europe. And 2018 saw Spain kick off with a record 214M€ for Spanish Startups.

A grooming of international talent

It’s not only Barcelona’s highly supporting education that helps groom the business talents of tomorrow; the city is also home to three of the top international business schools: IESE, ESADE and EADA.

These schools help stimulate both local and international talent (which, undoubtedly, impacts modern-day startups in Barcelona), providing an assortment of education programs that draw students from all over the globe who want to further their studies and careers.

A city that encourages startups

According to the investment fund Atomico, Barcelona is the third city preferred by entrepreneurs for new startups, only behind London and Berlin. Today, more than 1,200 startups are being nurtured in the city, with various factors deserving credit:

  • local infrastructures that feed and benefit from these projects;
  • public and private support programmes and services for entrepreneurs; and
  • the presence of internationally renowned trade fairs like the Mobile World Congress, 4YFN (4 Years From Now, the startup business platform of Mobile World Capital Barcelona that help grow startups, investors and corporations), Smart City Expo, IOT and Barcelona Games World.

The support of communities

Barcelona has become increasingly integrated and developed a much broader international perspective, in part thanks to the assistance of:

  • Barcelona Activa: A business incubator program with a small seed fund that provides advice and support to startups and entrepreneurs.
  • The 22@Barcelona Innovation District initiative, with an aim to convert the city’s old, industrial area of Poblenou into a prime technological and innovation centre, as well as increase the city’s leisure and residential spaces.
  • Barcinno, Barcelona’s no. 1 English-language tech resource for sharing news, knowledge and events regarding the city’s startup, tech and innovation communities.

Is it easy starting a company?

It is not always easy creating a new business in Barcelona. For one thing, personal- and corporate taxes are higher than in the UK. The administrative process for opening a startup can also be more complicated and costly compared to other European countries.

Another issue faced by young companies in Barcelona is a lack of global ambition, as well as a shortage of capital at the early and growth stage.

However, succeeding as a startup and being global from day one is not impossible, as evidenced by Scytl, Social Point, Trip4real, Tiendeo and numerous other companies currently thriving in Barcelona.

Let´s summarize, why is Barcelona a good spot for a startup?

Startups are one of the strongest employment and income generators in modern-day Europe. Apart from cost of living and being voted best location for office space costs, others factors that help stimulate startups in Barcelona include:

  • A competitive environment
  • Local and international talent
  • Access to venture capital
  • Fantastic infrastructures in a strategic location
  • First-rate business schools
  • A proven success model
  • High quality of life.