Barcelona’s tech talent hub seeks more government support

Barcelona has consolidated its place among Europe’s top cities for supporting fast-growing companies, but local entrepreneurs say it still has some way to go if it is to compete with the likes of Berlin and Amsterdam.

Although the coronavirus pandemic painfully exposed the Spanish city’s over-reliance on tourism, it also revealed its transformation from a monocultural to a multicultural city over the past 20 years — and its influx of new business talent.

“Without tourists, you noticed how many mainly young people from around the world live and work here, mostly in the digital economy,” says Mateu Hernández, chief executive of Barcelona Global, a not-for-profit organisation representing business and educational establishments aiming to attract skilled workers. “Talent is key in tech industries and is the key factor in the companies that are showing the most growth.”

A growing community of these workers — along with the warm Mediterranean climate, culture, good food, transport links and a lower cost of living than London or Paris — have combined to make Barcelona an attractive base for start-ups. The Catalan capital of around 1.7mn people is home to nine businesses featured on the latest FT-Statista ranking of Europe’s fastest-growing companies. This puts the city in 10th place by number of companies on the overall list, alongside Turin.

One of these companies is Tooltester — a software review business first established by Robert Brandl in Germany in 2009, before he fulfilled his dream of moving it to Barcelona three years later.

Although Brandl finds Barcelona’s bureaucracy and banking system frustrating, he sees the number of people with language skills as a big advantage. “We have seven nationalities among our nine employees,” he says. Tooltester delivered 2020 revenues of €3.6mn and a 2017-20 compound annual growth rate of 66 per cent, according to the ranking.

Many tech start-ups are establishing themselves in the former industrial district of Poblenou, which the city council is now promoting as a tech hub.

Sacha Michaud and co-founder Oscar Pierre chose the area when they set up Glovo, the food delivery platform, in 2015.

“It’s easy to attract talent, it’s small and densely populated and it’s cosmopolitan,” says Michaud, who adds that, despite there being no fast-track for visas, Glovo’s employees are largely international and typically aged 25-40. In common with other new ventures in the city, the lingua franca of the business is a mix of English and Spanish.

“Barcelona should aspire to be the European tech hub,” he says. “It has everything it needs to make that happen.”

The city also offers something for companies that focus on hardware as well as software. Enric Asunción was working for Tesla when he realised that, for electric cars to catch on, people needed to be able to charge them from home. He co-founded Wallbox in Barcelona in 2015 and the company now offers a portfolio of charging and energy management products across more than 80 countries, where it employs 700 people.

“Barcelona offers talent and also suppliers to [the] automotive industry, which is important because we also make hardware and you don’t often have both in one place,” says Asunción, who is Wallbox’s chief executive.

The downside is the time it takes to set up a company in Spain: 13 days compared with one day in the Netherlands, according to World Bank data. There are further bureaucratic obstacles such as obtaining residency papers, Asunción says.

An additional problem, he adds, is raising capital. “If you want to raise €1mn, it’s easy here, but it’s not possible to raise €200mn,” he explains. “So it’s a great place for start-ups but, when you want to scale up, you’ll have to look elsewhere for the money.”

Timo Buetefisch, a German who has lived in Barcelona for 20 years, co-founded Cooltra in 2006. The company rents out mopeds and bicycles by minutes, days, weeks or years, and has grown to 1.7mn users across several European cities.

“We were pioneers in Europe when we started here in Barcelona but, because of regulation, it’s now one of our worst markets,” he says. Buetefisch complains that, in 2020, the city “arbitrarily” set the number of moto-sharing vehicle licences at 6,958 and then distributed around 300 licences each among 21 competing companies “which makes no sense because no one can be profitable with 300 licences”.

In his view, “the one thing that would do most to improve the business climate would be for local government to adopt a more positive outlook on entrepreneurship.”

Spain is currently ranked 30th out of 190 countries in the World Bank’s 2020 Ease of Doing Business report, behind several other European nations including Lithuania, Germany and North Macedonia.

Hernández argues that Barcelona needs a “neutral” tax regime, as well — so that investors are not taxed on their assets abroad — and a “more flexible” administration. He also thinks the city should normalise the use of English in education and business.

“Above all, it needs to project an image of a business-like city,” he says. “So far, it has promoted itself as a place to visit and have fun but not as a serious place to do business.”