Fintech companies have been a turning point in innovation in the financial sector, not only in Spain but worldwide. “Fintechs managed to bring added value to certain clients, covered needs in markets of little interest or scarce attention for traditional banks. They have opened up an ideal space for innovation.”, explains Eduardo Aldao, Director of Innovation at ABANCA. Proof of this, he explains, “are the crowdfunding platforms, which enable the ability to finance small projects through the contribution of capital from a multitude of individual investors.”. In Spain, the Fintech sector comprises more than 400 companies, of which more than 70% are of Spanish origin. Half a dozen do not have a specific location.
75% of Fintechs in Spain actively collaborate with companies in the traditional financial and banking sector. According to a study prepared by Deusto Formación, Spain has become the sixth-largest alternative finance market worldwide by 2020, with an annual growth of 15%. Finnovating points out that the main reasons for these collaborations are the agility of Fintechs to adopt new technologies and test new business models, proximity to today’s and tomorrow’s customers, flexibility, and efficiency. If the pillars of the traditional sector are added to these values, such as trust, know-how, and a financial and customer muscle that the smaller ones would take a long time to reach-, the Spanish economy is facing a sector that will undoubtedly boost the country’s financial offer more than ever. For Eduardo Aldao, the differential value of these technology companies is focused on specialization, “fintechs, compared to traditional banking, are not generic solutions. They can focus solely and exclusively on solving a specific problem for their users, allowing them to understand their customer needs.”.
At the national level, this ecosystem has not only carved out a niche in major cities such as Madrid and Barcelona but also reached higher levels of action and projection. Although it is true that the Community of Madrid (more than 160 Fintech companies), and Catalonia (more than a hundred), occupy the podium of the scale, the fintech sector is also relevant in other Autonomous Communities: the Valencian Community, with 24 companies in this sector; Andalusia, which has a portfolio of close to 20 companies; Galicia, with more than ten; and the communities of Aragon, Castilla y León, and the Basque Country, with four fintech companies respectively.
The Spanish regions with the lowest number of financial startups are the Canary and Balearic Islands and Castilla La Mancha, with three fintechs respectively; Asturias, with two companies, and La Rioja, with one. The sector is clearly booming in Spain and is probably the sector that brings together the most companies. Many startups have managed to attract investment in recent years. In 2021, 22 investments were closed on fintech startups, moving more than 98 million euros. This figure highlights the confidence of the public and private sector, encouraging us to believe that we can reach, and even exceed, the figure obtained in 2020 of 204M€ invested in fintech startups.
Among the operations closed in 2021, Capchase obtained €103 million in June through a Series A round led by QED Investors. Securitize also obtained €40 million in a Series B round in June. However, if we go back to 2020, the protagonist was Flywire, which received €110 million in a round led by Goldman Sachs.
Despite these figures, Spain still has a long way to go in this economic area. An increase in fiscal support for investors and entrepreneurs is needed, as well as an injection of entrepreneurial culture. However, Spain’s position is similar to the United Kingdom or Germany in terms of startups. “Spain ranks sixth in the world in the ranking of countries that host Fintech startups.” defends Finnovating, in line with the collected data by Deusto.
Source: El Referente