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This change is crucial for entrepreneurs on the ground. Capital is available, but is less accepting of vague growth stories. Investors are looking for proof. Investors are looking for repeat business, predictable costs and a revenue stream that doesn’t rely on endless additional funding.
The year is busier, but there are fewer “mega” shows
In 2025, the number of transactions will increase by 11% to 376. At the same time, the average round size fell 14% to €9.4 million. The median round moved the other way, rising 34% to €2.14 million, a sign of more “middle” deals rather than a market dominated by a handful of headline-grabbing raises.
However, this isn’t a simple return of early-stage euphoria. Seed rounds fell 10% to 89. The year’s total also reflected a rise in later stages, with Series A increasing by 34%, and Series C rising by 65%.
The biggest cheques continue to shape the ecosystem. Rounds above €50 million were only 4% of deals, yet they accounted for 44% of the total invested volume. Even in a year that is “distributed”, big money moves the curve.
Software continues to grow in importance, but tech still dominates
The technology sector remained the main driver of Spanish startup investment. Scalable software and digital platforms continued to attract funding. Software was a major magnet for investment in some studies, aided by AI-driven software that promises efficiency gains, rather than pure growth.
It fits into the wider European pattern. AI is not the death of other industries but has changed investor expectations. The value of products is increasingly measured by what they automate and save, as well as how quickly they are deployed across borders.
Madrid and Barcelona still dominate the map, but it is expanding
Barcelona and Madrid have once again become the anchors of national football, combining talent pools, investor access, and operational expertise. But the momentum no longer belongs to just two giants. Many other hubs are growing around universities, research and local networks. These help to recruit, test and scale founders.
This gradual spread matters for Andalucía, Valencia and the north. When capital becomes less selective, regional economies tend to perform better when they have sector depth, credible routes to markets, and real customers.
The new rule is: Show your business, not only the vision
The market’s tone has changed. The “story”, while still important, is not the main event. Investors ask more questions about unit economics and churn. They also want to know how fast a company will reach sustainability.
Founders often have to make tougher decisions. Hiring plans slow. Product roadmaps narrow. Expansion is now staged, and based on evidence. Growth is welcomed, but must be managed.
Searching for answers?
Why did total investments drop when there were more transactions?
Were there fewer large rounds, the money would have been spread over a greater number of smaller transactions. The market is more active and less dependent on big deals.
Spain is still a good investment compared to other European hubs.
The data suggests resilience: funding remains above €3bn, and later-stage rounds are holding up. This combination usually indicates a working pipeline and not a stagnant scene.
What is the hardest stage right now?
The early-stage capital is less than what many founders want, as seed activity has decreased year-on-year. Later stages, however, receive a greater share.
A calmer market is a stronger market
2025 will be more about judgment than speed. Spain’s startup economy isn’t shrinking, but recalibrating with an emphasis on efficiency and durable models. It tends not to create as many hype cycles but instead stronger companies.
Next, the real test will be whether or not today’s midsized rounds can translate into scaleups that remain Spanish in footprint but think globally in ambition. There is still money to be made. The patience has shortened. The teams that are able to prove in numbers that innovation is also a business will win.
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