For many years, in Barcelona's entrepreneurial ecosystems, the company Glovo was presented as the great success model. An inspiring example to show the way to many other entrepreneurs who aspired to find their particular El Dorado without leaving the city. The goal of entrepreneurs, incubators, and accelerators was to build startups that could become scaleups and one day become a new unicorn. A term that refers to startups that reach a valuation of one billion dollars.
The first reference to tech unicorns was made by Aileen Lee, founder of Cowboy Ventures in Palo Alto, back in 2013, in her article Welcome to the Unicorn Club: Learning from Billion-Dollar Startups. In it, she analyzed software companies founded in the 2000s, a period of speculative cycle and uncontrolled growth in the value of internet-related companies that eventually exploded, causing a severe global crisis. In Spain, old-timers remember the case of Terra Networks as a symbol of the rise and fall of dot-coms. Aileen Lee then estimated that only 0.07% of tech companies reached a billion-dollar valuation, and that they were as rare to find as finding a mythical unicorn.
Today, those tech unicorns are already a reality in the global entrepreneurial ecosystem. According to the stock management app Eqvista, in 2024 there are already more than 1,549 unicorns spread across 53 countries and 291 cities worldwide. Barcelona, as one of the new global digital capitals, aspires to be a reference city and home to some of these unicorns. Not in vain, in the Spanish startup ecosystem there are already nine recognized unicorns: Glovo, Cabify, eDreams, Idealista, Devo, Jobandtalent, Travelperk, Wallbox, and Flywire. Most of them have successfully identified and exploited market failures or shortcomings by leveraging the potential of the digital economy. These are companies that offer new products or services with an innovative business model, scaling rapidly thanks to investor confidence and successive funding rounds, even though some of them have proven not to be profitable yet.
New economy companies, in addition to a bold and innovative business model, must have a recognized and shared corporate purposeThe economy is largely based on trust, and some startupsthey have known how to play their cards well and have known how to generate those positive expectations among investors. In some cases, these expectations have proven excessive, but in the name of innovation, the new economy, and also in some cases taking advantage of regulatory loopholes, theirfoundersthey have managed to sell the virtues of their business models and make money.Those that manage to survive and consolidate, in most cases, usually end up controlled by investment funds or large corporations far from the foundational city, as is the case with Glovo.The companymade in Barcelona was bought in 2022by the German giant Delivery Hero in an operation valued at 2.3 billion euros. Despite the success of the operation, even then its business model, its labor practices, and its medium and long-term sustainability were being questioned.
The case of Glovo is a good case study on some of the foundations on which some of these new economy companies are based, and especially on the model of companies we want to promote or attract to Barcelona. Glovo is a reference company in the world of startups currently immersed in a significant legal, economic, and reputational crisis. A reality that should make us reflect on new business models. Do we want scaleups and unicorns based in Barcelona where the unit of measurement of success is solely the turnover or capitalization? Or, on the contrary, can we bet on business models that grow and scale generating a triple positive impact, that is, economic, environmental, and social?
Some of us argue that the Barcelona Valley should be coherently associated with the city model we defend and with attributes we want to project to the world. New economy companies, in addition to a bold and innovative business model, must have a recognized and shared corporate purpose. It is not enough to scale quickly at any cost, but to do so ethically and decently, that is, without perpetuating situations of economic or labor precariousness. Some will think, this is the market and business is business. And probably the world is largely like that, but some of us defend a different Barcelona model in which ethical ambiguities or legal loopholes are not the perfect excuse to build extractive but inclusive business models.
Administrations are clearly behind the reality of the digital economy and often lack instruments or clear legal backing. This is where society comes into play, granting or eroding companies' social license to operate, that is, influencing the perception of reputation and also contributing coherently with our actions as consumers. We cannot ask citizens to be heroes, but we can contribute to generating states of opinion and demanding reasonable and fair regulations. The Glovo case is a good example of this. The more its business grew, the more social and institutional opposition grew against a model that forced the interpretation of labor relations.
Innovation, to be coherent, must be associated with a recognizable, shared, reasonable, and fair corporate purposeFinally, in 2021, the so-called Law was approved and came into forceRider, a regulation that regulates the work of delivery drivers who work for digital home delivery platforms, establishing a series of obligations for companies operating in this sector.Glovo decided to answer it by ignoring its precepts and challenging the administration. A legal confrontation that perhaps intended to force a change in the framework of labor relations in Spain.
Three years later, with hundreds of millions of euros in fines, penalties, criminal liability proceedings against the company, and even with the risk of prison for its administrators, Glovo rectifies and proclaims that it will comply with labor legislation by incorporating riders into its workforce. A complete U-turn that highlights the need to revisit some of the precepts with which some of these new economy unicorns operate. Innovation, to be coherent, must be associated with a recognizable, shared, reasonable, and fair corporate purpose. Our business models cannot be oblivious to the need to maintain the social license to operate. I think this is a timely reflection for Barcelona's entrepreneurial ecosystem. What kind of companies do we want to promote? Let everyone draw their own conclusions.