Fintech in Spain: An introduction to the growing ecosystem

While Spain might not be the first country that comes to mind when you think of fintech, the local scene is growing fast. According to the Asociación Española de Fintech, Spain has the highest number of fintech companies per capita in Europe, and it’s second only to London as a fintech hub.

So what do you need to know about the local fintech ecosystem? 

I’m Elliott Locke, and I’m the founder of abroaden, a wealth-building platform, based in Barcelona, for people living abroad. As a founder and graduate of Tenity’s fintech accelerator programme in Spain, I share some of the key trends and data about the country’s fintech scene. 

I cover:

• Key statistics about fintech in Spain
• What’s the history of fintech in Spain?
• What makes Spain a good place for fintech?
• What’s the future of fintech in Spain?
• What are some well-known fintechs in Spain?
• Case study: abroaden and Tenity’s accelerator programmes

Key statistics about fintech in Spain

Let’s kick off this guide with some key statistics about the country’s growing fintech startup sector. 

These are statistics from Dealroom (2022) and EY (2021).

• In 2023, the Spanish tech ecosystem is worth €93B, up 3.6x since 2018.
• Spain welcomed four new unicorns in 2022, including Fever, Factorial, Domestika and TravelPerk.
• In January of 2023, Spain’s Startup Law came into effect. The law encourages the creation and development of startups by giving certain benefits to startups and investors such as a 15% tax rate reduction and digital nomad visa.
• There were a total of 376 fintechs in Spain in 2021, made up of:
  • 275 local fintechs
  • 77 foreign fintechs, and
  • 24 acquired by established banks.
• 80% of Spanish fintechs were concentrated in Barcelona, Madrid, and Valencia
• The Spanish fintech sector earned $1 billion in funding between 2018 and 2021:
  • That was made up of 340 deals
  • $201 million was the largest deal
• Spanish investors (46%) were the most active, but Europe outside of Spain made up 28% of deals and North America 20%.

According to Fintech Global, Spanish fintechs have grown six-fold since 2015. Fintech Global reported that Spain has a 56% fintech adoption rate, and is currently ranked 21st globally and seventh in Europe in consumer Fintech adoption. This is a higher rate of adoption than France, Italy, and even the US. 

What’s the history of fintech in Spain?

As is true of most other countries’ fintech sectors, fintech in Spain grew out of the 2008 financial crisis. Prior to this, there wasn’t a lot of financial innovation in Spain. Rather, the local financial services sector had been dominated by large established banks, many of which had been operating in a similar way for centuries.

Something that characterised Spain in particular before the financial crisis was a high growth in credit. This was mainly in real estate, in the form of consumer mortgages. According to the BIS, household debt was equivalent to 80% of GDP. And as a result of the crisis, the financial sector lost the equivalent of €80 billion.

This crisis led to a general distrust in traditional banks and financial institutions in Spain. And this distrust would later provide significant opportunity for fintechs, as they could offer financial products and explore different business models that were alternatives to established institutions.

In the wake of the crisis, then, we saw significant growth in innovative financial services. In my experience, up until 2022, about 40 fintechs were launched each year in Spain, with at least one a month in Barcelona. Lendtech—from mortgages to consumer-focused microlending—grew in particular. And as we saw above, it now accounts for about a quarter of the market.

Against this backdrop, though, regulation remained quite strict. This was due to the conventionally conservative nature of the financial system, but also due to additional regulation that was introduced post-crisis.

That said, today, Spain is trying to create a friendlier environment for entrepreneurs, where it’s easier to start a business, invest, and relocate. 

Part of this effort has been the 2023 Startup Law. The legislation makes it easier to relocate or start a business, encourages collaboration and innovation, and reduces some of the admin for people coming into the country for work.

Additionally, it has cut corporation tax from 25% to 15% for the first four years of business. And it offers foreigners a flat tax of 24% on their income (compared to the standard tax bands that can reach 50%). It could have a big impact on attracting foreign talent. 

What’s more, in 2022, Spain launched a new financial services regulatory sandbox, to make it easier for fintechs to innovate. And in the same year, Europe’s first AI sandbox was set up in Spain, suggesting the country has ambitions to continue to grow as a tech hub.

What makes Spain a good place for fintech?

Spain is clearly a growing hub for founders and investors in financial services. But what makes it a unique place to set up or move your fintech?

1. Spain is a bridge between Latin America and Europe

Thanks to its geography, history, and language, Spain has strong ties to both the rest of the European continent and Latin America. If you’re looking for a headquarters that bridges these two regions—or you have plans to expand in either—Spain is a great choice. 

As a European base, Barcelona makes most sense. Spain is in the European Union, the largest common market in the world. But with its proximity to France, Barcelona tends to face more towards northern Europe. 

This diversity gives Spain an advantage over many other European countries. France or the UK, for instance, don’t tend to have this enduring connection with their ex-empire when it comes to financial innovation. And this makes Spain a really exciting global centre. 

Meanwhile, Madrid is better known as a hub of Latin American founders and investors. Fintechs from Latin America can use Spain as a springboard if they want to grow in Europe. Meanwhile, it makes sense for European fintechs to work in Madrid to access the Latin American market, such as Mexico and Colombia. 

2. Spain’s regulation provides a rigorous basis for growth

Spain’s regulatory environment has historically been a challenge for fintechs and other startups. But over the years this has improved, with legislation such as the Startup Law making it easier to set up and grow a business and hire talent. 

Regulators want to be sure that startups, particularly those in financial services, have a strong compliance and risk team. As such, as a fintech, even in the early stages, you may need to hire a compliance expert to sit on your board, become a tied agent of a regulated firm or build on top of the rails of an embedded finance provider.

However, this regulatory rigour does have its benefits. For instance, once you’re established in Spain, you’ll be well positioned to tackle other regions’ regulatory environments. 

As mentioned, though, regulation is generally becoming easier, as Spain has shown its commitment to improving the tax regime and the visa system. For instance, the Startup Law has reduced the amount of capital required to form a limited company from €3,000 to €1, while there are also tax benefits for local and international entrepreneurs. 

What’s more, promising startups in Spain have opportunities for supervision from larger banks and regulators through the new financial technology sandbox. The programme is picking up speed, as in 2023, applications closed for the fifth cohort of startups.

Overall, for local and international fintechs, this provides a financial environment that’s clean and well-supervised.

3. Spain is a large market with a vibrant fintech community

While Spain is a useful bridge between Latin America and Europe, it’s also a major market in its own right. 

It’s the fourth largest domestic market in Europe, with a population of 48 million. And, what’s more, it’s a population that’s highly engaged with fintech products already. As I shared above, it has a 56% fintech adoption rate—making it an attractive market for any successful fintech. 

Fintechs and founders should come to Spain not just for the potential audience for products, but for the existing fintech community too. Barcelona is one of the top five cities for startups in Europe, and Madrid comes close as well, with startups receiving 774,8M€ in investment in 2023. Both cities provide a really supportive, diverse, and exciting fintech ecosystem—which you can benefit from in two main ways. 

Firstly, you can access expertise about how to grow, build, hire, and succeed. There are now about 700 fintechs in Spain, and many aspiring founders, executives, investors, and mentors too. 

Generally, this community is one of the best assets you can have as a founder. The shared expertise can help you avoid the pitfalls and common mistakes that all founders experience. Plus, it can help you build connections with people that may be useful in future, such as compliance or tech experts. Spain’s vibrant socialising culture also translates to the business scene. Tech communities and other business-related organisations regularly hold meetups, creating learning and networking opportunities that are unmatched in other European hubs. Fintech is no exception.   

Secondly, you have access to talent. Barcelona and Madrid have a hugely international place, where you’ll find people with knowledge of diverse markets and languages, as well as some great talent from world-leading universities such as IE Business School. It’s a really deep pool of talent and resources to pull from. And, something not to be underestimated, the cost of labour here still tends to be cheaper than in northern Europe too. 

Overall, Spain presents a highly supportive ecosystem for you to found your startup, grow, and hire.

What’s the future of fintech in Spain?

Generally, there’s a lot of room for optimism about Spain’s fintech industry. The foundations of the sector and a solid community are there—while there are promising signs of continued growth too.

Alongside the government’s attempts to improve the regulatory environment, there are plans to support Barcelona as a European financial hub. For instance, plans for a finance hub within the Barcelona Stock Exchange were made public in 2023 with the project going live in mid-2024.

Overall, though, I think fintech in Spain will parallel trends that we’ll see across the rest of the world. I expect a lot of emphasis and innovation in AI, for instance, as well as other technologies driven by data.

Currently, the B2C Spanish market is fairly mature, dominated by foreign fintechs such as N26 and Revolut. Plus, there’s Bizum, a local instant peer-to-peer payment service, which has grown hugely in the last three years to now make up 95% of all instant payments transactions. It has helped power Spain to become one of the leaders in instant transfers, which make up 53% of all transfers processed in Spain (compared to 15% across Europe), according to the Bank of Spain (Banco de España).

With this consolidation in B2C, more interesting developments are going to happen in B2B. For instance, I expect embedded finance to grow further, along with user experience fintechs too. I also expect growth in niche products for specific industries, such as for freelancers or the building management industry. 

In reality, though, we may not often see again the dizzying growth that brands such as Revolut have enjoyed. Yet there are opportunities for venture capital investors to profit in niche markets, if they have the specialist knowledge, and can time their entry to deliver profitable returns for their limited partners.

What are some well-known fintechs in Spain?

Some well-known Spanish fintechs include:

• BNext. Spain’s leading mobile-first neobank is based in Madrid. It was valued at €138 million in 2022. 
• Bizum. Originally backed by the Bank of Spain in 2016, it’s now responsible for 95% of instant transfers in Spain. 
• PayFlow. Founded in 2020, PayFlow is a payroll management fintech, allowing employees to get paid whenever they want. It now has funding of over €32 million. 
• Unnax. An embedded finance and open banking solution that was acquired by Powens in 2024.
• Strands. Founded in Barcelona, Strands is a B2B solution for enhancing client engagements. It now has offices in Atlanta, Buenos Aires, and Kuala Lumpur.
• Flanks. A robo-advisor based in Barcelona that can automate 80% of wealth management processes.
• Kantox. One of the first fintechs to arrive in Barcelona in 2021, its mission is to provide transparent and affordable currency risk management solutions to SMEs. It was acquired by BNP Paribas in late 2022. 

Case study: abroaden and Tenity’s accelerator programme

I founded abroaden in 2020 as a wealth-building platform for people living abroad. Since then, I’ve also co-founded the BCN Fintech community in Barcelona, a network of people in the fintech industry who are eager to come to industry events and meet others.

In 2021, abroaden joined Tenity’s first Fintech Incubator and Accelerator programme in Barcelona. Tenity was born as an open innovation partner as part of SIX, the Swiss Stock Exchange. Today, while they don’t run incubators in Spain anymore, they do have hubs across Europe and Asia.

To end this guide, I want to share how Tenity’s incubator helped us as a fintech based in Barcelona.

1. Tenity connected us with local specialist expertise

One of the most impactful things that Tenity did for me and abroaden was to connect us with incredible people in the fintech scene. Through Tenity, we built a network of mentors, investors, partners, experts, and more.

This has enabled me to build my network, but it’s also helped me to find the skills and expertise that I’ve needed along the way. For instance, navigating a different country’s regulations is tricky, wherever you might be, and it’s always good to have a local partner to guide you through it.

Four years on, I’m still in touch with my mentors, and whenever I need them I can just reach out. 

2. Tenity helped to refine our offering

Over the five months of the programme, I achieved more than I had in the previous year. From an operational perspective, it made me think like a startup innovator and it really helped me to develop my MVP, for instance.

Throughout the programme, I worked with experts in marketing, building a board, technology—even in mindfulness. Tenity really covers everything you need as an early-stage founder. 

Last year, we decided to pivot the abroaden project slightly, where we moved from focusing on wealth execution to providing information and knowledge on money and finances to our target audience. During this pivot, Tenity supported us, relying on their experience helping other early stage startups to successfully readapt their business model.

It helps that Tenity is a specialist in fintech, not just any general startup accelerator. It means they really know about the industry and the particular challenge and experience of founding in fintech. 

3. Tenity gave us access to an international network

Another benefit of working with Tenity has been their vast network of hubs across the world. There’s one in Madrid, alongside Switzerland, Estonia, Singapore, and now Istanbul.

In all of these countries, they have access to local knowledge of the fintech ecosystem, as well as investors and everyone involved in the local accelerator programmes that they run. This means that if you need some connection in any of these hubs, Tenity is able to provide that for you.

Plus, it presents a great opportunity for global growth, if these are your ambitions. 

Learn more about the accelerators Tenity runs. 

Fintech in Spain: Access to LatAm and Europe and an attractive market to grow in 

With international talent, global reach, and a supportive ecosystem, Spain is a really exciting place to get involved in the fintech scene as a founder. And I’m incredibly grateful to Tenity for helping us at abroaden find mentors, advisers and help us grow the company. 

From Tenity’s Madrid hub, they work to connect fintechs with incumbents, help financial institutions invest in startups, and give fintechs the support they need to grow.

Get in touch with Tenity to find out more.