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Barcelona, Spain — Latin American startups and scaleups are setting their sights on Spain as a key market for investment opportunities and scaling their businesses, writing a new chapter in the field of business relations between Latin America and that European country.
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Spain’s linguistic and cultural affinities, good climate and thriving technology scene have been attracting the attention of Latin Americans, who are using the country as a launching pad into the European arena.
The initiatives come from both the government and the companies themselves.
At the helm of Acelerar.es, an initiative of the Leandro Sigman Foundation, Argentine Francisco Niethardt organizes an annual event to connect 12 Argentine startup founders with 70 Spanish market leaders. The program, which is heading into its seventh edition, selected in March as its 2023 winners proptech company Pulppo and sustainable solvents company Bioeutectics.
“In each edition we analyze between 400 and 600 startups: we help Latin American companies, especially Argentine ones, to go global,” Niethardt tells Bloomberg Línea, who adds that, of the more than 70 startups selected by the program, around 60% ended up setting up shop in Spain.
“I see a lot of Latinos coming. If Spain does things right it can certainly become a hub for expansion.”
Aivo CEO and founder Martín Frascaroli
Room to scale
And it’s not just startups that are looking at Spain. Larger companies already consolidated in their countries of origin, even in the United States, are also looking to Spain to scale their operations.
One success story is that of Aivo, a customer service software company based on artificial intelligence technology. The Córdoba, Argentina-based company, which is legally registered in the US, opened an office in Madrid at the end of 2021, and is also present in the UK and 11 other Latin American countries, and has 212 corporate clients, 125 employees and expects to bill $15 million this year.
“I see a lot of Latinos coming. If Spain does things right it can certainly become a hub for expansion. It is true that many companies are trying because the situation is complicated in these markets. However, Spain’s Startup Law created an environment that helps attract and retain talent,” Aivo CEO and founder Martín Frascaroli tells Bloomberg Línea.
Argentina’s Globant, a service and consulting provider focused on artificial intelligence, arrived in Europe five years ago with the company’s entry into Spain. Since then it has built a team of more than 1,000 people in the country, with offices in Madrid, Barcelona, Málaga and Logroño. The company now has a market capitalization in excess of $7 billion.
In an interview with Bloomberg Línea, Martin Umaran, co-founder and president of Globant in EMEA, said that his decision to land in Spain has to do mainly with the presence of customers from various parts of the world and the unicorn’s own global clients, such as Iberdrola, Inditex/Zara, Santander and BBVA, to mention a few.
“There is an abundance of talent, it is a friendly and open place to do business, and with great companies,” Umaran said. In Spain, Globant’s focus is on the financial services and travel segments.
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Spain also looks to Latin America
Spain’s government is also undertaking efforts to attract Latin American startups and scaleups. It has created a visa for digital nomads and implemented a new tax treatment of stock options, a measure that is part of the Startups Law.
It also promotes meetings between companies and investors, offering public financing and advising entrepreneurs. According to Adrián Blanco Estévez, whose task at ICEX-Invest in Spain is to attract investment from Latin America, last year 12 companies had some 40 meetings in Spain, some of which, since then, have established themselves in Spain.
“In addition, we have a program for attracting foreign entrepreneurs,not specific to Latin America but those who participate most are Latin Americans, called Rising Up in Spain, which puts Spanish multinationals in contact with foreign entrepreneurs to collaborate with each other,” Estévez tells Bloomberg Línea.
These and other initiatives show material results: international investment from Latin America reached record levels in 2022, some $73.44 billion, 75% higher than a year earlier. Brazil, Mexico and Chile have accounted for nearly 80% of foreign direct investment from the region since the beginning of the pandemic, a percentage that was maintained last year.
Spain has been a natural gateway: 39 investment projects were announced this year by Latin American companies. According to the report Global LATAM 2022, by ICEX-Invest in Spain and the Ibero-American General Secretariat (SEGIB), the accumulated Latin American investment in Spain now amounts to €68.36 billion since 1993, when the historical series began, which represents 11% of all foreign investment received by Spain during the period.
Participation of Spain’s autonomous communities
Spain’s autonomous communities also have cards up their sleeves to get innovative companies from other parts of the world to take root in Spain. This is the case of the Catalan capital, with Barcelona & Partners, an initiative of companies and individuals to energize the city.
Latin American companies are targeted by the group, which claims to be Spain’s leading private investment attraction agency, especially in the financial technology, video games, smart mobility, advanced manufacturing and life sciences sectors.
“Barcelona stands out in this European ecosystem and among the top 10 globally,” according to Barcelona & Partners CEO Montse Puig Ponsico.
“Just to give you an example, 40% of gaming companies in the world have a presence in the city,” he said.
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