Biscay (Bizkaia), in Spain’s Basque Country, is building on its industrial heritage to develop a startup ecosystem spanning biotechnology, advanced manufacturing, energy and emerging technologies.
With public investment, R&D incentives and collaboration between businesses, research institutions and government agencies, the region is positioning itself as a destination for deeptech innovation.
I recently attended BIOSPAIN 2026 in Bilbao, where I explored the region's approach to supporting startups, its advantages, and the challenges that remain.
Building on industrial and life sciences expertise
Biscay is home to more than 300 companies, 20 research centres, four universities and leading hospitals, forming an ecosystem that generates more than €9.4 billion and supports 62,000 jobs.
The region is a major hub for the Basque Country's life sciences sector, accounting for 45 per cent of its companies and 56 per cent of revenues. Its more than 135 life sciences companies support over 27,000 jobs and generate €5.2 billion in revenue, with particular strengths in biomanufacturing and advanced therapies.
Investment continues across biotechnology, aerospace, advanced manufacturing, renewable energy and robotics.
A major bioscience and healthcare project led by I+Med will involve €72 million in investment over three years, including €28 million for R&D, and is expected to create more than 600 jobs.
The region also offers a competitive tax regime and financial incentives. Investors in innovative companies can benefit from a 35 per cent personal income tax deduction. In comparison, capital gains on exit are eligible for a 50 per cent exemption, rising to 100 per cent if reinvested in startups or technology ventures.
Professionals relocating from abroad can receive a tax exemption on up to 50 per cent of their salary for 11 years.
Companies can also access tax deductions of up to 70 per cent for R&D activities and 15–20 per cent for technological innovation.
Alongside financial incentives, Biscay has invested in specialist infrastructure, including the Energy Intelligence Centre, Basque Hydrogen Corridor, Automotive Intelligence Centre and Bizkaia Quantum Advanced Industries initiative.
An intentional approach to supporting startups
During my time in Biscay, I spoke with Olatz Goitia Urkiaga, Director General of the economic development agency BEAZ, Oscar Ugarte, Director of Seed Capital Bizkaia and Amaia Jugo, Managing Director of Bizkaia Talent .
For Goitia, one of Biscay's distinguishing features is the collaboration between public organisations, each contributing different expertise and resources.
Alongside BEAZ and Seed Capital Bizkaia, these include the provincial tax authorities and Lantik, the Provincial Council's technology company. Lantik supports access to advanced technological infrastructure, including quantum technologies, while the tax authorities can introduce measures to attract businesses and investors. Seed Capital Bizkaia provides financing and investor networks, while BEAZ offers business development and innovation support.
"What makes the system work is bringing these organisations together around the needs of companies," Goitia explains.
"These departments don't necessarily work together in the same way elsewhere. Here, we've developed relationships that allow us to coordinate their activities and provide more comprehensive support."
For a relatively small region, she believes this collaborative approach can make a significant difference in helping startups establish themselves and grow.
The support is structured around different stages of company development.
- Entrepreneurs can access grants of up to €60,000 to validate ideas through prototyping, market testing and commercial analysis.
- Once a business is ready to launch, the Creation of Innovative Companies programme provides grants of up to €85,000 towards incorporation, intellectual property, premises and specialist recruitment.
- For companies ready to scale, Seed Capital Bizkaia, the provincial government's venture-capital company, provides financing through participating loans and equity investment.
Public and private capital: A different approach to startup funding
Founded in 1989,
was established when few organisations were willing to take the risks of investing in early-stage companies. According to its Director Ugarte, its approach combines public and private capital, with banks participating both as shareholders and co-investors in its funds.
"What makes us distinctive is that we combine public and private capital. Banks are among our shareholders, and they also participate as co-investors in our funds," he explains.
The organisation manages investment instruments spanning seed funding, growth capital and social impact, alongside a crowdfunding platform.
"Our role is to take risks that other investors might not be prepared to take, while bringing private capital into the ecosystem."
Seed Capital Bizkaia typically provides around 40 to 50 per cent of a funding round, with private investors covering the remainder. Ugarte says the organisation is also willing to experiment with financing models that might seem unusual for a public institution.
"When we speak to other public administrations in Europe, we sometimes realise that we're doing things quite differently.
Sometimes we take approaches that might seem unusual for a public institution. But the objective is to respond quickly and provide practical support."
Crowdfunding brings local investors into the ecosystem.
One example is Seed Capital Bizkaia's crowdfunding platform, established in 2019 to let ordinary citizens help finance local projects. The platform focuses on innovative businesses and projects delivering positive environmental or social impact. Its current approach centres on lending, with financing rounds typically ranging from €100,000 to €200,000. Ugarte says demand has been encouraging:
"We recently completed a round in just eight minutes. People are waiting for opportunities to invest because they're interested in the projects and the returns."
Beyond raising capital, the platform introduces residents to innovative companies operating nearby that they might otherwise never encounter. "We see it as a combination of financial participation, community engagement and promoting local talent," he says.
From industrial innovation to GovTech
Biscay's industrial base also provides opportunities for startups developing technologies for established sectors, particularly energy, automotive and healthcare. Ugarte says the region's research institutions, hospitals and industrial expertise have helped establish a strong foundation for innovation.
"We started supporting health and biotech projects around 30 years ago. We have universities, doctors, researchers and healthcare institutions that provide a strong foundation for innovation."
Seed Capital Bizkaia typically backs one to three new healthcare projects annually, although biotechnology requires a longer investment horizon.
Beyond industry, Biscay is encouraging startups to develop solutions for public administration through a GovTech initiative that has been running for around three years. One of the biggest challenges, Goitia says, has been changing how government departments approach procurement and innovation.
"Public administrations are accustomed to buying existing products and services. But sometimes those solutions don't meet their needs."
The initiative encourages departments to identify problems and explore whether startups could develop more effective solutions. This has involved training public-sector teams, including procurement staff, to work differently with innovative companies.
"We now identify around three to five public-sector challenges each year. The idea is to give innovative companies opportunities to develop solutions to real problems within public administration."
From startup to scaleup: Closing the funding gap
Despite its support for early-stage companies, helping startups scale remains a challenge, particularly for those moving into industrial production, much like elsewhere in Europe.
Goitia acknowledges:
"The challenge comes when they need to scale, particularly when that involves industrial production. That's an area where we still need to strengthen the ecosystem."
Ugarte, however, argues that Biscay's comparatively affordable talent and research infrastructure give companies a reason to maintain their operations in the region:
"If you compare the cost of operating here with somewhere like Boston, the difference can be significant. Boston has access to enormous amounts of investment capital, but companies also face much higher costs for talent and infrastructure."
Seed Capital Bizkaia is also building international investor relationships through its fund-of-funds activities, including investments in funds in Estonia and Portugal.
The aim is to connect local companies with specialist investors and create relationships that can bring additional capital and expertise into the region.
"We've spent years developing these relationships, and that makes a real difference. It's not simply about having funding available. It's about helping companies access the knowledge, partnerships and infrastructure they need."
Attracting international talent — and giving people reasons to stay
Access to skilled workers is another priority. Bizkaia Talent is a nonprofit initiative backed by the Provincial Council of Bizkaia and leading Basque companies and universities, working to attract, develop and retain highly skilled professionals.
According to its managing director, Amaia Jugo, the organisation works closely with employers to understand their recruitment needs and supports international professionals considering relocation.
"We work with a wide range of businesses, particularly SMEs, which have very different needs. We also help professionals who are considering moving to Bizkaia for work.
However, support goes beyond finding employment to support with practical matters such as housing, schools and other services people need when relocating.
"The goal isn’t simply to attract professionals to the region, but to help them settle here and encourage them to stay."
The region's industrial economy creates particular demand for specialised technical skills, including industrial automation.
Bizkaia Talent is developing initiatives to connect employers with qualified professionals from countries such as Colombia and Peru, where skilled workers may have fewer local employment opportunities. It also supports pathways from education into industry, including placements that allow international students to gain work experience with local companies.
Jugo emphasises the importance of designing these initiatives around employers' actual needs.
"Sometimes public institutions develop programmes without listening closely enough to the people they're supposed to support. We try to do the opposite."
Companies that have established operations in Biscay include Woza Labs, a climate tech startup that relocated from London to Bilbao and uses AI-driven climate modelling to help companies such as Iberdrola strengthen electricity grids against extreme weather.
Another is Satlantis, an Earth observation company founded in Florida that subsequently established its headquarters in Biscay while retaining US operations. Its technology provides high-resolution satellite imaging for applications including methane emissions detection.
Biscay startups to watch
Cocoon Bioscience
Founded in 2022 as a spin-off from Spanish biotech company Algenex, Cocoon Bioscience uses insects in their chrysalis stage as natural bioreactors to manufacture proteins.
Its CrisBio platform produces recombinant proteins, including enzymes and growth factors used in pharmaceuticals, life sciences and cultivated meat.
In September 2024, Cocoon opened a 4,000-square-metre manufacturing facility at the Bizkaia Technology Park in Derio, with an initial annual production capacity of five kilograms of recombinant proteins and the potential to scale beyond 20 kilograms.
Fisify
Fisify develops digital physiotherapy solutions combining AI with the expertise of qualified physiotherapists.
Its AI-powered virtual physiotherapist, Aurya, uses computer vision to analyse movements, measure range of motion and provide real-time feedback on exercises.
The platform adapts programmes to users' progress, while human physiotherapists monitor recovery.
Fisify works with businesses, insurers and physiotherapy professionals to improve access to rehabilitation and injury prevention.
Gloop
Gloop is a Spanish foodtech startup developing edible alternatives to single-use plastic cutlery. Its products include plant-based spoons, straws and coffee stirrers designed to remain functional during use before being eaten like a biscuit.
Gloop's straws can withstand up to 80 minutes in cold drinks, while its spoons remain intact for around 20 minutes in ice cream. Its products are used in more than 130 establishments, and the company is working towards industrial-scale production.
Legit.Health
Legit.Health develops AI-powered technology to help healthcare professionals diagnose, assess and monitor skin conditions. Its platform analyses photographs to identify more than 300 conditions, including psoriasis, eczema, acne and potentially malignant lesions.
It also measures disease severity and monitors treatment progress. The technology is designed to support earlier intervention, improve access to dermatological care and reduce administrative workloads. Customers and partners include Sanitas, Cigna and Spain's public healthcare services.
Protellix
Protellix is a biotechnology startup based in Derio, Biscay, developing AI-powered technology for protein and enzyme engineering. Launched in October 2026 as a spin-off from CIC bioGUNE, the company was founded by computational chemistry researcher Gonzalo Jiménez-Osés and biotechnology entrepreneur Juan Pablo de Giacomi.
It combines AI, physics-based molecular simulations and laboratory testing to design proteins more efficiently, with applications in therapeutic proteins, industrial enzymes and molecular binding technologies.
Lead image: The Guggenheim Museum Bilbao ( I recommend a visit if you're in town).
Would you like to write the first comment?
Login to post comments