A glance at the startup ecosystem forming in Valencia (Spain)

We recently spent a couple of days in a burgeoning startup ecosystem in Spain, where talent is plentiful, wages are relatively low and temperatures are high.
A glance at the startup ecosystem forming in Valencia (Spain)

A beautiful Spanish city by the beach, blessed by a year-round mild climate, filled to the rim with amazing restaurants and architecture, with an up-and-coming startup ecosystem that could use a boost or two to finally kick into gear.

You'd be forgiven if you immediately think of Barcelona, but I'm referring to its smaller sibling, about 300 kilometers to its south, the birthplace of (proper) paella and home to the unrivalled annual Las Fallas festivities - Valencia.

Spain's third-largest city, it is dwarfed by Madrid and Barcelona in population significantly - approximately 800,000 compared to 3.2 million and 1.6 million, respectively.

I recently spent a few days in the lovely ciudad at the invitation of the Spanish business angels association, which held its annual Congress in Valencia. I was scheduled to tour its (surprisingly many) startup accelerators and incubators, which I had to unfortunately cut short due to illness.

I did, however, learn a few key things about the Valencian startup scene that I didn't already know, most of it during a frank conversation with some local business leaders from Bbooster (Spain's first accelerator), Angels Capital, Big Ban Angels and Lanzadera.

First thing I learned is that it's an anomaly that Valencia isn't more often cited among the European cities best equipped for fledgling tech startups to set up shop in. Valencia offers a vast amount of talent thanks to its university and business schools, offers an extensive support system for early-stage businesses that many European cities lack (a network of savvy business angels, incubators like Demium and accelerators like Plug and Play, sufficient room for housing and office space such as Geekshubs, organisations such as VIT Emprende), and of course has the benefit of balancing it with a fantastic, sunny lifestyle.

Valencia's biggest strength for startups, however, is in fact a sad result of the most recent financial crisis, which wreaked havoc on the city's ability to battle unemployment and offer young people a bright future within its borders.

That is to say Valencia has something going for it that other European cities such as Lisbon or Sofia also have: technical talent is both easy to find, cheap to house and most importantly very easy to afford (junior developers make about 600 euros a month, I was told). Needless to say, a €1 million seed round will take you a lot further in Valencia compared to, say, London, Paris, Stockholm or even increasingly Berlin.

Which brings us to Valencia's biggest problem: its ecosystem is simply too immature, too undeveloped, too invisible almost to support startups when they outgrow the challenging early stage of their businesses. To find investors, or talent that knows a thing or two about scaling, startups that start out in Valencia will often have to move base to the two bigger cities in Spain, or abroad (case in point: Valencia's leading tech star, fintech company Flywire, is in fact headquartered in Boston, USA).

Valencia simply can't compete on the level where companies need to grow fast to stand a chance; it lacks the VC firms, experienced engineers and seasoned business development managers to take those crucial next few steps. A lot of brains have been drained from here in the past decade or so, and foreign talent looking for their next temporary home will be more likely swayed by the allure of places like Barcelona or Lisbon to combine work with a Mediterranean lifestyle.

This is of course a problem faced by many if not most cities in Europe, and there's no amount of great food and rays of sunshine that can fix that. The only things that will are hard work, patience, a collaborative community and a willing government that understands startups' oh-so-vital role in creating new jobs, innovation and an economic upswing over time.

There are no shortcuts to take here. Valencia's startup scene will have to continue walking the walk to get on the radar.

I didn't meet a lot of local startups unfortunately due to my aforementioned illness, but I was kindly passed on this list of 10 Valencian startups that you might want to keep tabs on:

1) Flywire helps people live globally and pay locally. They process payments on behalf of consumers from 200+ countries and territories, in more than 100 local currencies, to institutions worldwide.

2) Beroomers offers students and young professionals worldwide a safe platform where they will be able to find accommodation easily, connect with future roommates and book their new home safely online before they arrive.

3) MrJeff makes the cloth cleaning process easy. In less than a year it is present in the 3 main cities of Spain, Barcelona, Madrid and Valencia. 30% monthly growth and more than €2 million raised.

4) Mobincube is software that allows the creation of apps for everyone without knowing how to program. They currently have 1 million users (app developers) registered in the USA (17%), Spain (17%), Mexico (9%), LATAM (20%) and APAC - who have created 110,000 apps (Android, iPhone and Windows Phone) that have been installed 140 million times.

5) Onbile is an online platform based on a cloud computing system that helps you create high-quality websites for any mobile device. Through an easy-to-use control panel, you can choose from a wide range of templates to find the design that best meets your needs and the appropriate structure to manage your contents.

6) Cronoshare is a marketplace to get or perform small services or tasks between people and professionals. Users can perform services and earn money or can request other users to perform services. Leading the Spanish market, they have launched in Italy, Portugal, Brazil and France.

7) Blinkfire Analytics provides a social media analytics and publishing platform for professional sports organizations, their players and agents, and the brands that sponsor them.

8) Startupxplore: named one of the most promising Spanish startups of 2016, Startupxplore is a cross-border syndicate investing platform that helps inexperienced and time-savvy investors, to diversify their portfolio, by co-investing with a group of top-level local investors, with a proven track record on startup investment.

9) Yeeply is a premium marketplace of the best mobile & web talent for your technical projects. Companies using Yeeply save money, reduce risk and get more control over their projects.

10) Codigames develops social video games, multiplayer in real time and multi platforms for mobile platforms set in the genre of management and strategy. It aims to become the leader in multiplayer video games on mobile phones.

(Thanks to Luz, Hortensia, Enrique, Cecilia, Javier, Jaime and everyone else I forgot)

Featured image credit: Christian Müller / Adobe Stock

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