The company Badi started up in Barcelona in 2015 by the hand of its founder, the entrepreneur Carlos Pierre. His business idea was both simple and innovative. Through a platform, available on the web and mobile phones, Badi offers its users a system to find the perfect home for one’s needs and preferences. It can be seen as a Tinder at the service of tenants seeking to share expenses in a gradually prohibitive housing market price. The idea caught on and Badi has now become one of the most promising firms in the Proptech sector, that is, those combining new technological solutions in a fully-developed sector like the housing market. In less than two years on the market, Badi can boast of having raised over 8 million euros of private funding, most of it on its foundation year, resulting in an influx of several foreign funds. Leading the funding has been Spark Capital, an American fund that has previously backed companies such as Twitter and Tumblr. Another funding company that joined in was the Luxembourg-based Mangrove Capital Partners, one of the companies behind other Catalonia-based start-ups like Letgo or Wallapop.
Catalonia undertook 75% of the business transactions completed with international funds, that is 30 transactions out of 40, at national level. This percentage has remained similar to previous years, even higher when considering evolution figures
These are not isolated cases. In the last few years the interest in capital funds risk or ‘venture capital’ in the Catalan entrepreneurial sector has rocketed, not only from national funds. Offices from London, New York or the influential Silicon Valley have positioned Catalonia, especially its capital city Barcelona, in their spotlight. The figures bear witness to this global interest on Catalonia. A quick overview of statistics published by the Associació Espanyola de Capital, Creixement i Inversió (ASCRI, Spanish Association of Capital, Growth and Investment) confirms the importance of Catalonia, especially Barcelona and its leading role in Spain. According to the latest study published by the ASCRI, in collaboration with CaixaBank, on start-up investment from ‘venture capital’ funds (with data from 2016), Catalonia undertook 75% of the business transactions completed with international funds, that is 30 transactions out of 40, at national level. This percentage has remained similar to previous years, even higher when considering evolution figures obtained by ASCRI. In terms of investment volume, Catalonia hands the stage over to Madrid in 2016, as it was in the Spanish capital where the main operations were signed, although in 2015 the opposite occurred.
According to this study, the total investment of this ‘venture capital’ in Spain in 2016 amounts to 579 million euros. Of these, nearly 180 came from public institutions like CDTI or ENISA, accelerators or networks like Business Angels. The rest came from national and international funds. In the case of Catalonia, its start-ups attracted 73.9 million euros, that is, 32% of the overall funds raised from international funds, and 50,9 million euros (33% overall) of funds raised nationwide. In fact Catalonia, together with Madrid, are the two territories attracting most of the activity on this sector, virtually inexistent in the rest of the Spanish state. By sectors, the study reveals that digital businesses and those related to consumer products are the favorite of these funds, as they total half of the investments made.
THE ENTREPRENEURIAL HUB OF THE SOUTH OF EUROPE
As reported in The New Barcelona Post in the article Barcelona, a campus of entrepreneurs, the Catalan capital has become a true investment attraction pole for start-ups because of its leading position as one of the most relevant and fastest-growing entrepreneurial hubs of the south of Europe. Evidence of this is the old building of Palau de Mar, which plays host to over 100 technological businesses, many of which funded by foreign entrepreneurs who have selected Barcelona as their business basis. Under the shelter and impulse from the association Barcelona Tech City, Pier01 –the building that houses this project – is the best showcase for this ecosystem. Such names as Drivy, Housfy, Tiendeo, Cornerjob or Holaluz share space in these headquarters with consolidated businesses like Samsung, Visa, CaixaBank or Seat, which have set up breakthrough facilities to foster research on new services and applications.
This entrepreneurial hub has become a forced route for global investors, as is 4YFN, a space dedicated to start-ups in the Mobile World Congress held in Barcelona. The MWC’s edition has counted on the participation of 600 businesses and has gathered over 700 investors interested in learning about new projects, many of them related to or coming from Catalonia. One of these American investors explained that, although a few years ago almost nobody in the US considered investing on businesses coming from here, the situation has changed. There are many factors that have contributed to this change of mind. On the one hand, successful businesses from Barcelona or its area of influence focusing on spearheading global business models (like Privalia, Social Point or Wuaki, to name just a few) started attracting foreign capital interest. On the other hand, the irruption of ‘multientrepreneurs’ turned into investors, like Dídac Lee, Carlos Blanco or Miguel Vicente, have paved the ground and provided the endorsement for this sector. Equally important is the fact that Barcelona has managed to import global talent on account of the city’s excellent quality of life. Besides, the Catalan capital offers the perfect environment to start up global projects because of its high-quality business universities and schools and its qualified workforce. Barcelona is a city which plays host to people from virtually all nationalities and one where costs are quite lower than those from such cities as Paris or London. Together, these factors account for the increase in the start-ups ecosystem in the last few years, as well as the city’s capacity to attract capital funds.
There is still a long way to go, though. For example, the sector keeps warning that the shortage of tax incentives slows down the appearance of more private capital for entrepreneurs. This is why the investment figures are still low, as regards the GDP. Surely enough though, Barcelona, and also Catalonia, is one of the main gateways for venture capital in the south of Europe, and such success stories as Badi’s are not isolated cases.