Investments in Spanish FinTech companies fell last year, despite an increase in number of deals of 66%.
The total amount of private capital invested in FinTech companies has been declining since 2014 when a total of $12.8m was raised. In contrast, the number of transactions has doubled in the same period. Last year 40 FinTech deals closed, pointing to steady growth in the early-stage deal segment of the market.
- The volume of deals under $2m has grown at a CAGR of 29.9% since 2014, in line with a 122.2% increase in the number of deals in that segment during the same period.
- Looking closely into the figures, the fall in total private investments was due to a fall in a small number of large deals valued above $2m. In 2014, 63% of the total investment in Spanish FinTech was made up of two large deals totaling $8.1m. One of these deals was to Only-Apartments, a Spanish real estate platform, which raised $4.7m in May 2014. In 2015 there was only one deal in that segment – a $2.8m Series A funding round to accounting and expense management company Captio.
- Figures for Q1 2017 paint a positive picture for Spanish FinTech. Q1 2017 saw $6.4m invested in Spanish FinTech, more than half of the total investment for the whole of 2016.
- The strong first quarter of the year was driven by the $2.4m raised by Housers, a real estate crowdfunding platform based in Madrid.
The Spanish FinTech ecosystem has been growing for the last three years
- The number of active FinTech companies based in Spain has grown by 41.8% in the last three years.
- 2015 saw 45 new FinTech companies emerge in Spain, while in 2016 only 24 new companies were recorded.
- The number of active companies in Q1 2017 remained constant as no new registered companies have been disclosed.
Three sectors make up over half of the FinTech ecosystem in Spain
- More than 50% of FinTech companies in Spain fall into 3 FinTech sub-sectors; Payments & Remittances, Marketplace Lending and Infrastructure & Enterprise Software.
- 20% of Spanish FinTech companies fall into the Payments & Remittances sector, making it the largest FinTech segment in Spain.
- The smallest sectors in Spanish FinTech (grouped as Other) include companies that fall into the Blockchain, RegTech, Cryptocurrencies and Data & Analytics. Together they make up only 10% of the FinTech ecosystem.
Madrid is the FinTech leader in Spain with 101 FinTech companies headquartered in the city
- Out of the 234 FinTech companies in Spain, 43,2% are located in Madrid. Barcelona is a distant second with 51 companies headquartered in the Catalonia’s capital.
- Just over one third of companies in Spain are headquartered outside of Barcelona and Madrid in regional towns and cities.
Spain’s FinTech industry is well grounded and spread throughout the country. Despite a fall in total financing over the last three years, Q1 2017 was a record quarter and hints at a potential breakout year. The increase in deals valued $2m and below looks set to continue with companies such as international mobile payments provider Coowry raising $1.06m in February 2017. Whilst Q1 2017 saw the return of deals above $2m so far it looks like funding is being spread more evenly with smaller, more frequent investments in new companies.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies in Spain as well as across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2017 FinTech Global