Angel investing in Spain

AvaLaw has investor clients from over 60 countries. Although most our clients invest in Spanish real estate, due to the changes in the market, we have seen a big increase in their interest in other kinds of investments, like angel investing in Spain.

That is why not only do we cover news and insights about the real estate sector on our blog but also about the hospitality market, the wine industry in Spain, and more. Today we want to focus our attention on an investment option linked to startups: angel investing in Spain.

What is angel investing in Spain?

Angel investing is equity finance. An angel investor is a high net worth individual who makes use of their personal disposable finance to fund an external business. The investor normally takes shares (an equity stake) in return for providing equity finance (up to one million euros). Angel investors typically seek to have a return on their investment over a period of 3-8 years.

Is the Spanish startup market a good one for investors?

We think so. The Spanish startup ecosystem grew at a good pace in 2016, at 20% over the previous year, reaching 3,275 companies. Moreover, private investment grew in volume by 58% in the first half of last year. These positive figures were revealed during the Business Angels National Congress 2016, celebrated the 23rd of November of 2016 in Valencia and organized by the Big Ban Investment Association.

The sector’s main players are very optimistic and highlight the unstoppable growth of Spanish startups pushed by entrepreneurship, great ideas, Internet development and new technologies. The presence of new investment funds and the very significant increase of money coming from Japan are also worth mentioning.

According to Javier Megías, CEO of Startupxplore, there are 2,006 business angels throughout the country, representing a growth of 117% year-on-year, and over 1,000 business angels from outside of Spain interested in investing here. The main national entrepreneurship hubs are Madrid, Barcelona and Valencia.

Barcelona startups

The Government of Catalonia via its agency Acció has recently created Barcelona & Catalonia Startup Hub, an online platform that puts over 1,086 Catalan startups with growth potential on a map. The data shown on the platform describe an active and dynamic ecosystem. One in every four companies finds investment in advanced stages, in the so-called series A (from €1m to €5m), B (from €5m to €20m) and C (from €20m to €200m). The remaining 75% are in the initial phases, having gotten or looking for angel investment (up to €1m).

Catalonia accounts for 56% of the volume of investments made in Spain, a total of €373.5m in 2015. Moreover, according to the Spanish Association of Capital, Growth and Investment (ASCRI), the region accounts for 71.2% of international venture capital raised in the country and 53% of investment operations. The capital raised between 2014 and 2015 by Catalan startups coming from international venture capital grew 109%, exceeding €277m. 85% of the startups in Catalonia are located within a radius of 50 km of Barcelona city.

If you are considering an investing in business in Spain and want legal advice on how to do so, please don’t hesitate to contact us.