When Juan de Antonio first set up Cabify, the Spanish car-booking app valued at $1.4bn, the government treated him with “aggression”, he said. “They were more interested in protecting old industries than encouraging innovation.”
So a year later in 2012 he and his team moved operations to Latin America, initially Mexico, Peru and Chile, where the reaction was different. “They saw us as creating jobs, solving problems and innovating . . . they welcomed us and it was exciting.”
Thanks to success in Latin America, the Madrid-based company that competes with Uber, has today become one of the most successful tech start-ups in Spanish history with the coveted “unicorn” status reserved for those groups worth more than $1bn.
But Cabify’s bad experience in Spain, said Mr de Antonio, should be a wake-up call to the government that it needs to do better at encouraging innovation or risk falling behind in the race to dominate new industries.
This comes as governments across Europe — notably in France under President Emmanuel Macron — are making a huge push to encourage new technology companies in the hope of fostering the next Facebook or Amazon-like success.
Meanwhile, the Spanish start-up scene is at a crossroads. While still much smaller than those in the UK or France, it has since 2013 moved from a relatively insignificant player on the European stage to something more substantial.
Investment in tech start-ups in Spain grew 45 per cent in 2017 to €780m, according to a study by Mobile World Capital Barcelona. This is compared with just €207m in 2013. About 3,500 start-ups exist in the country, up 20 per cent from 2016.
Entrepreneurs have been encouraged by a growing number of big-ticket sales to larger companies, for example Privalia, which was bought by French fashion group Vente-privee for nearly €450m in 2016. Social Point, the game developer, was last year bought by Take-Two Interactive in the US for about €250m.
Maxi Mobility, the parent company of Cabify, this year raised $160m from investors including Japan’s Rakuten at a valuation of $1.4bn. Classified ad app LetGo, which was started in Barcelona, also became a “unicorn” last year.
“The wider ecosystem for start-ups in Spain is improving a lot,” said Mr de Antonio. “There is more money, ideas and talent than ever before.”
But he said that this had often come despite rather than because of the Spanish government.
Over the past seven years “the Spanish state has felt like more of a hindrance than a help”. He added: “It’s strange that the country we have generally been made the least welcome by the government is our home, Spain.”
Mr de Antonio’s comments come as the new Socialist Spanish government has promised to crack down on car booking apps. On Friday, it passed a new decree that will in effect nullify thousands of private-hire driver licences (VTC) used by ride-hailing companies.
The licences will expire after four years, and local authorities will have the power to issue new ones as they see fit. This means that the current ratio of one VTC licence for every 30 taxi licences could be drastically reduced in some municipalities.
Traditional taxis have been lobbying hard against the VTC licences, and this is a victory for them. Taxis say that ride hailing companies such as Cabify are hurting their livelihoods with unfair competition that is driving down prices.
Cabify has also been attacked by the leftwing Podemos party in Spain for not paying enough tax, something that the company denies. “Attacks like this really hurt, because they are just not true,” said Mr de Antonio.
Despite these conflicts, Mr de Antonio said he still hoped that the new Spanish government, which took over in June and is led by 46-year-old Pedro Sánchez, will start to take steps to make life easier for entrepreneurs and make promoting innovation a core part of its economic strategy.
Mr de Antonio, along with a broad section of entrepreneurs and investors, wants the government to focus on ending the burdensome bureaucracy in Spain, which makes forming and growing a company challenging.
He said that the rules around awarding share options to employees should be better, for example, while taxes on some investors such as business angels should be less burdensome.
Potentially encouragingly for Cabify and other similar groups, the socialist government — while yet to lay out concrete proposals — has said it wants to make Spain a “start-up nation”.
Elaborating on this theme, Francisco Polo, the secretary of state for digital transformation, who is a former entrepreneur, said he wanted to make Spain “a honeypot for talent” and “a trailblazing nation”.
The call for action from Mr de Antonio, an engineer by training who lives in a modest part of northern Madrid, has added weight as he rarely gives interviews and is not someone who courts publicity or makes extravagant claims.
“Juan is focused on his vision to transform mobility in cities,” said Beatriz González, the co-founder and managing partner of Seaya Ventures, a Spanish venture capital firm that started in 2013 and was an early investor in Cabify.
“He is extremely intelligent, has great judgment, and he is always thinking about the long term and the impact of all his decisions.”
Francisco J Riberas, executive chairman of Spanish auto-parts supplier Gestamp, added that Mr de Antonio was a true impresario who “had proved to be passionate about his business model, committed to results and a really hard worker”.
“Juan has been able to combine the use of technology with a global trend on new developments of mobility,” he said.
However, while known for his modesty, his plans and ambitions for the company are anything but modest.
He wants to continue expanding the company, which has 13m users, in Iberia and Latin America while at the same time looking at different business opportunities in the field of “mobility”. The company has a business allowing people to rent electric scooters via their mobile phone.
“Everything to do with cities and transport is being disrupted, and we want to be at the forefront. Change is coming, whether governments like it or not,” he said.
Barcelona challenges Madrid
Cabify is based in Spain’s capital city, Madrid, but many of the country’s most exciting new companies have started in the country’s second city, Barcelona.
Companies such as the delivery app Glovo, the second-hand market app Wallapop and the corporate travel platform Travelperk are all based in Barcelona.
The port city has a more international feel than Madrid, and with beaches and a strong culinary tradition is an attractive destination for young talent.
According to a study from Boston Consulting Group this year, Barcelona is the fourth most attractive city in the world for workers, only surpassed by London, New York and Berlin.
But it is also carving a niche for itself in technology, with established large companies opening high-tech centres in the city.
In June, the German group Siemens became the latest, inaugurating its new digital innovation centre in Barcelona with a team of 50 people.
Some non-Spanish entrepreneurs are also moving to Barcelona, seeing it as not only an attractive location but a good jumping off point to get into the Latin American market.
One of these is ID Finance, a fast-growing fintech company founded by two Russians, Boris Batine and Alexander Dunaev, which specialises in online lending in emerging and growing markets.
“There is talent and money pouring into Barcelona,” said Mark Tluszcz, the chief executive of Mangrove Capital Partners, a venture capital firm with investments in groups such as Wallapop and the mobile classifieds app Letgo.
“It’s become a really great place to start and grow a technology company . . . and of course it helps that the quality of life is fantastic.”
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