Spain’s scale-ups are joining together to lobby politicians and press the economic case for their high-tech, high-growth business model more generally, in the latest spark from the country’s rapidly expanding digital industry. Cabify, Factorial, Filmin, Glovo, Wallbox, Holaluz, Neuroelectrics, Jobandtalent, and Red Points are among the nine founding firm members of EsTech (aka ‘Es’ for Espaa).
As EsTech’s president informed local media covering the event, the organization aims to establish the circumstances for a new IBEX35 rooted in technology, and the plan is for it to grow significantly in size as well. According to Carina Szpilka, a general partner at the Madrid-based VC firm K Fund and president of the broader Adigital digital business association, which is supporting EsTech’s launch alongside another local trade group, Endeavor, and the Spanish VC association, Ascri, many more of Spain’s 400+ fast-growing startups will soon be big and ambitious enough to join the program.
Other fast-growing Spanish firms such as Typeform, Travel Perk, Heura Foods, and Wallapop have been mentioned as possible contenders to join the club. “We are certain that the participation of these types of businesses, particularly scale-ups, is critical to the country’s prosperity and economic progress.” That’s why we started talking to them, approaching them, and sharing the vision we have for our nation in the future, and that’s how this project came to be,” Szpilka tells TechCrunch.
By the end of the year, Adigital predicts that Spain will have 20 unicorns. To emphasize the importance of such high-growth companies to the economy, Szpilka claims that even a handful of billion-dollar-plus valuation tech enterprises would contribute 1% of the country’s GDP. EsTech seeks to represent a larger ecosystem of over 450 scale-ups with a goal of attaining 40% tech GDP by 2030. “The [EsTech] purpose is to make it easier to start and grow these kinds of businesses, whether they become unicorns or not.” “I’m not concerned with the $1 billion value; we’re concerned with job creation, revenue, and the’social cash flow’ that these kind of businesses can provide,” she says.
According to Szpilka, Spain’s high-growth businesses have remained a little “under the radar” in terms of positive perceptions of their influence. “Many people are unaware of the influence that these types of businesses have.” And which, we believe, is enormous. This collection of [nine EsTech founding] firms generated more than €4 billion in revenues last year, and they presently employ 10,000 people directly in Spain.” She also provides job creation figures for the Spanish ecosystem’s larger base of 400 or so scale-ups, which were responsible for 324,000 additional employment in 2020.
“The forecast for 2021 — which has yet to be verified — is for roughly 670,000 jobs. As a result, we’re already talking about a sizable portion of Spain’s workforce.” “The impact is quite astounding, and we are confident that by sharing and making society aware of the contribution, we will have a good influence,” Szpilka continues. EsTech’s three main objectives boil down to advocacy around 1) talent — both promoting talent development within Spain and attracting more international talent to the country (which means lobbying on related tax regimes); 2) regulation, seeking to influence domestic initiatives such as Spain’s new startup law as well as at an EU-level where regional digital policy is set; and 3) raising the profile of scale-ups on the global tech stage and locally where entrepreneur skills are needed.
On the regulatory front, the local IT sector has praised Spain’s first startup statute, which was adopted in draft and presented to parliament in December. However, there has been considerable criticism that the qualification standards for the bundle of tax rebates and other perks are too low, effectively excluding all but the most early-stage firms. EsTech appears to be leaning toward such position, despite the fact that it was still working on its policy strategy at the time of writing.