As 2023 draws to a close, the startup scene breathes a quiet relief after a year of turbulence and looks ahead with cautious optimism. The year’s peak investment was still in focus from two years prior, attracting attention with a multi‑million dollar influx. If 2022 closed with more than 3.365 million investments, a drop of 843 million compared to the year before, analysts estimate that Spanish startups might see financing fall by about 42 percent in the current year. Even with a cooling global economy, venture capital remains a strong driver, and artificial intelligence is set to become the pivotal technology that could rejuvenate funding flows for Spanish startups.
AI is crossing into many sectors, accelerating progress across multiple domains. In health care, AI is paving the way for precision medicine, telemedicine, and regenerative therapies. Legit.Health illustrates this trend by employing artificial intelligence to diagnose dermatological conditions and to gather clinical data from images captured on mobile devices or cameras. In 2024, renewable energy is expected to gain fresh momentum, with sustainability metrics and automation powered by AI, as shown by Green Eagle Solutions using a platform that coordinates renewable assets. Finally, the finance landscape is likely to remain a hot topic, with fintechs like Taglia offering comprehensive platforms that streamline daily business operations.
The takeaway is clear: AI is poised to be a dominant force next year, unlocking significant investment opportunities. “There is a clear opportunity to realize the potential and practical use cases of artificial intelligence across sectors, in a safe and reliable way,” notes Luis Garay, partner at Samaipata, a venture capital fund. For example, AI is expected to transform digital customer experiences, enabling more natural online interactions and bringing the online and physical worlds closer together. Interfaces in tech tools—once accessible only to programmers—will increasingly rely on natural language, creating vast possibilities. As AI becomes more widespread, new challenges will emerge in managing and maintaining AI systems, especially in enterprise environments, which will demand robust tools and solutions.
Shifts in interest rates
Since early 2021, the investment landscape has faced a steady downturn. The war in Ukraine amplified global economic uncertainty, fueling inflation and prompting central banks to tighten monetary policy to curb price rises. As a result, startup financing has become more expensive, with venture funds tending to prune their bets and focus on companies with established business models and solid strategic plans. E-commerce bore much of the early impact of the market tightening, as restrictions from the pandemic eased, physical dining reappeared, and easy money receded from consideration.
For startups, survival remains the central challenge, particularly for those that have prioritized securing funding over attracting new customers. The ecosystem has learned to adapt to a shifting global context, but the current climate calls for major strategic recalibrations. Industry leaders like Diego Fernández, CEO of Gellify Iberia, describe a period of intense adjustment as funds tighten investment rounds and markets face crises, demanding more disciplined growth and clearer roadmaps. The sentiments reflect a broader transition as the market stabilizes and investors reassess risk and opportunity.
Market dynamics and resilience
Despite recent headwinds, the Spanish startup ecosystem demonstrates notable resilience compared with many peers. Although the number of deals in the current year holds steady or grows slightly, liquidity that favored technology investments in previous years contributed to foreign capital inflows in Spain. Observers point to stronger activity in early financing rounds, from pre‑seed to seed stages, with a modest uptick in Series B rounds. This pattern suggests a pipeline of early‑stage ventures that could mature as conditions improve.
Looking ahead to 2024, while the sector expects a partial thaw, the transformation will continue. Market experts anticipate that monetary policy shifts could positively affect technology valuations, supporting growth and potentially accelerating IPO activity in the near term. At the same time, the industry recognizes that investment appetite may slow among individual angels who are taking a cautious stance to observe how the market settles. Yet the overall sentiment remains forward‑looking, with investors and entrepreneurs preparing to navigate a more selective but opportunistic environment.