StudyTechnological and Digital Sectors

Barcelona2014  

Sectoral Observatory

Index

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Foreword 3 Executive Summary 4 Facts & Figures - start-ups/companies 7Facts & Figures - revenue 13 Facts & Figures - funding 16 Analysis of necessities 20 To Sum it up 22 Conclusions 24 Method 26 Acknowledgements 28

ForewordBARCELONA TECH CITY, previously Ecommerce&Tech Barcelona, through its Sectoral Observatory, has conducted the first ever study on internet and mobile companies in Barcelona.

This study aims to render an overview of the sector's current state, corresponding to the end of the fiscal year 2014, through a series of facts & figures about the sector. Those are frequently updated to enable assessing the evolution and the impact of internet and mobile companies in Barcelona.

The present study digests the main figures based on the combination of criteria defined by the Observatory, to measure the hiring of professionals, the revenue, the international presence, the project phase and the financing phase of participating companies.

In addition, both start-up and established companies were asked what their priorities and preferences were in terms of factors deemed crucial for the success of internationally known technological hubs such as Berlin, London or Tel Aviv.

The study is based on the first report on Barcelona's digital sector by Manuel Matés (Necotium) published in 2012, in which he underlines Barcelona's potential as an international technological

hub , especially in Southern Europe. The results of that study showed the impact of the top 20 tech companies in Barcelona in terms of recruitment (5,000 professionals), conjoint revenue figures (over €2bn) and international presence (over 40 countries).

We would like to thank all companies who had the will and the patience to participate in that study, which was the first step to assess the sector's activity in Barcelona.

We hope that you will find this first study on Barcelona's technological sectorinteresting.

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(1) "Barcelona E-Commerce: Un cluster líder en el Sur de Europa" Profesor Manuel Matés, Març 2012. http://goo.gl/xyZtRP

Executive Summary

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Executive Summary2014 Revenue

€6bnRecruitment

9,500 professionals

International presence60%

of surveyed companies

Over 50 countries

Activity on international markets

Average age of the sector’s companies and start-ups

4,8 years

Start-ups created in 2014

19% of surveyed companies

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Facts & Figures

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Start-ups &Companies

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Facts & FiguresAge start-ups

and companies

Before 2010 2011 2012 2013 2014

19%14%

9%9%

49%

Average 4,8 years

The aver age age o f participating start-ups and companies is 4.8 years.

4 9 % o f t h e m we r e created before 2010.

33% of star t-ups and companies included in the sample were created between 2013 and 2014

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Facts & FiguresBusiness model:

Clients

There is a majority of B2B business models in terms of client relations - nearly 41% - f o l l o w e d b y a m o d e l comb in i n g bu s i ne s s - to -business and business-to-consumer, which reaches 33%.

Finally, nearly 26% of survey participants had a business-to-consumer model

B2B41%

B2B/C33%

B2C26%

B2B 41%

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Facts & Figures

SectorsMedia

Software

Ecommerce

Travel & leisure

Social Networking

Gaming

Mhealth/Ehealth

Edtech

Fintech

Hardware

Telecom

Others 5%1%1%

2%2%

3%3%

4%9%

18%24%

29%

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The media sector, which includes video, music, adtech, and content creators among others, is the most present one, with 29% of the sample.

Software, e-Commerce and travel & leisure also are the remaining predominant sectors among surveyed companies.

Media 29%

Facts & Figures

Participation in incubator or accelerator programmes

33%of surveyed start-ups have taken part in one of them

Here are entities, organisations and programmes indicated in which said start-ups participated in:  

AntaiVentureBuildersBarcelona Activa (Growth Academy w/IESE; MIT)Barclays Accelerator (Powered TechStars)BStartUp10Conector Startup AcceleratorEGI GroupFundación InleaGrupo IntercomImagine K12 (USA)IncubeIncubioInvestment Readiness Program (UK)Salle Technova BCNSeedrocketStartupbootcamp (ALE)UAB - Parc de RecercaWayra

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Facts & FiguresInternational

presence

60%60% of surveyed companies declare themselves active outside of Spain.

Major European markets are: The United Kingdom (35%), France (34%), and Italy (34%), followed from a distance by markets such as Germany (25%), the Netherlands (23%) and Nordic countries (22%).

The activity of Barcelona's start-ups and companies in America are concentrated in the USA (29%), Brazil (27%), Colombia (27%) and Chile (23%) and, at a lesser degree, Argentina(18%).  

UKFrance

ItalyMexico

USAColombia

BrazilGermany

NetherlandsChile

NCBelgium

ArgentinaIreland

SingaporeRussiaChinaJapanKorea 6%

7%7%

13%14%14%

17%18%

20%22%22%

24%25%25%

28%29%

34%34%

35%

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Revenue

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Facts & FiguresBusiness phase:

Seed to Revenue

In development / project ready

Under 100K

100K - 500K

500K - 1M

1M - 3M

3M - 10M

Over 10M 13%

16%

14%

5%

14%

21%

17%83%of surveyed start-ups

have a revenue

For the 2014 fiscal year, among star t-ups and companies in revenue phase, 21% of surveyed companies had a revenue lower than €100,000, while 30% of them reached that amount.

Between 1M€ and 10M€. 13% of them had a revenue higher than €10M.  

Approximately 17% of surveyed companies were in the seed phase, in the preparation phase or in the project launching phase.  

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Facts & FiguresRelation between business

model and revenue

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B2C

B2B

B2B/C 3%

5%

92%

Companies and start-ups with a B2C business model turn over92% of all sampled companies' conjoint revenue.

Companies with a B2B or B2B/B2C model, despite being a majority, turn over 8% of the total.

B2C companies and start-ups

turn over

92%of the total for all

surveyed companies

Funding

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Facts & FiguresFunding

Friends, Fools & Family

Business Angels

Venture Capital

Public loans (ENISA, CDTI, ICF, ....)

Banks

Other 4%

17%

39%

22%

30%

20%

In terms of funding mix received by companies and star t-ups, Business Angels are a majority, followed by VC and FFF with respectively 22% and 20%.

In terms of debt-based funding, public loans (ENISA, CDTI, ICF) are the most common debt organisation used by companies, with a percentage as high as39%, followed by bank funding with 17%

International investors Some of the most frequent countries of origin are USA, France, UK, Italy, Switzerland, Belgium andAustria.

52%

17

of surveyed companies have received BA-VC

funding

Facts & FiguresValued professional

profiles

Developers / Programmers

Marketing

Sales

Business Development 1%

5%

48%

60%

According to 60% of surveyed companies' responses, the most valued profile is developers/programmers. The second most valued profile (48%) is marketing professionals.  

60%programmers and developers - most

valued profile

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Facts & FiguresMost valued

executive profilesCEO

CIO

CTO

CMO

COO

CDO 1%

7%

18%

21%

4%

6%

In terms of executive profiles, the most valued ones are Chief Technical Officer (21%), Chief Marketing Officer (18%) and at a lesser degree, Chief Operating Officer (7%).

21%Chief Technological

Oficer

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Analysis of necessities

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Facts & FiguresAnalysis of necessities

Access to talent

Press and Advertisement

Suitable legal and fiscal environment

Hiring international talents

Regulatory environment

Access to technological partners

Access to funding

Access to infrastructures

Mentors and Smart Money

Access to Administration 2,64

2,69

2,85

2,99

3,08

3,13

3,13

3,25

3,56

4,39

Marks form 0 to 5

Companies valued some of the criteria deemed crucial in the establishment of internationally known technological hubs (London, Berlin...)

According to them, access to talent is the most important necessity, followed by access to press and advertising, and a legal and fiscal environment adapted to start-ups and tech companies

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Talent

To Sum it up

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To Sum it up

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1. The total revenue has risen to €6bn (Study1 by Prof. Matés published in 2012 - €2bn).

2. The number of professionals hired by tech companies based in Barcelona has reached 9,500 (compared with 5,000 according to the 2012 study). This soar was fuelled by the organic growth of established projects as well as the increasing number of entrepreneurs building their personal projects and creating new start-ups.

3. Overview of start-ups and tech companies in BarcelonaA young sector

• Average age of start-ups and companies in the sector: 4.8 years• 19% of companies were created in 2014

Business models mostly focussing on B2B or B2B/B2CA substantial part of the sector's conjoint revenue comes from major B2C players in the hub (92% of conjoint revenue)Main activity sectors: Media - including Video, Music, Digital marketing agencies, Advertising technologies, Content creation and more -, Software, e-Commerce and iTravel&Leisure.33% have participated in a public or private incubator/accelerator programme

4. Barcelona's start-ups on global markets60% of surveyed companies are present on international marketsPresence in over 50 countriesMajor regions

• Europe: UK, France Italy• America: Mexico, USA, Colombia and Brazil• Africa: South Africa• Asia: Singapore, Japan, China• Oceania: Australia

5. FundingCapital investment

• 52% of the sample's companies and start-ups received funding from Business Angels and Venture Capital companies

Debt-based funding• 39% of surveyed companies received funding from public support programmes

(ENISA, CDTI, ICF,…)Growth and capitalisation: Companies from the sector have entered the MCE

Spanish stock exchange (Edreams-Odigeo), and others (Only-Apartments) chose the MAB alternative stock exchange market, an alternative way of achieving capitalisation

6. TalentMost valued professional profiles are developers/programmers - which is the

most valued profile - and marketing professionals.In terms of executive profiles: CTO and CMO are the most valued profiles

7. Analysis of necessitiesSurveyed companies prioritize• Access to qualified talent• Access to press and advertising,• Legal and fiscal environments adapted to the sector's characteristics• Possibility to hire international talents easily.

(1) "Barcelona E-Commerce: Un cluster líder en el Sur de Europa" Profesor Manuel Matés, Març 2012. http://goo.gl/xyZtRP

Conclusions

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Conclusions

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Since the first figures, which were the base for the development of BARCELONA TECH CITY - previously Ecommerce&Tech Barcelona - were published in 2012, the sector has experienced positive evolution, both in terms of conjoint revenue - from €2bn to €6bn - and of recruitment of professionals by companies and start-ups based in the city – from 5.000 to 9.500 - or international development.

In the last few years, the city was able to highlight the Mobile World Congress in exceptional dimensions, to attract large-scale international projects such as EBay Enterprises, Rakuten, king.com, Schibsted Media Group and Airbnb, and to keep fuelling the growth of a hub housing companies like Edreams-Odigeo, Privalia, Atrapalo, Trovit, Grup Intercom and Scytl, established start-ups such as SocialPoint, Akamon, TradeInn, bodas.net, and other more recent ones such as Kantox, Miscota, Holaluz, Tiendeo and Marfeel.

Through the sector's evolution in the last few years, it has been made clear that its growth is based on two major pillars: talent and investment.

Start-ups and companies of the tech sector are scalable, fast-growing organisations, which have a considerable need for qualified human resources. Data collected for the study confirms that the number of professionals hired by companies in the sector has risen in a spectacular way, and the access to qualified talents is the most valued business necessity among the sector's companies.

In terms of funding, the local hub already has established VC firms such as Nauta Capital, Active Venture Par tners and Inveready Technology Investment Group, venture capital funds such as CaixaCapitalRisk, Angel funds like Antai BA, Cabiedes & Partners, Necotium, Sputnik, 101 Start-Ups and investor networks such as BANC, ESADE BAN, EIX Technova, IESE, Keiretsu, Seed Rocket. Also, we shouldn't forget that companies such as Privalia, Scytl and SocialPoint, with the support of said local investors, were able to attract prestigious international investors to Barcelona. Sales made by Barcelona's companies to international companies are just another sign of the sector's growth in the last few years - Duscksboard/NewRelic; Data Republic/KantarMedia; PasswordBank/Symantec; Icebergs/Pinterest; Wuaki.tv/Rakuten; Anuntis/Schibsted; Polymita/RedHat and, more recently, Trovit/Next, Zyncro/Rio Paranà, SitMobile/Soprano – and rounds closed recently by SocialPoint (€48m), Scytl (€104m – 2014) and stock exchange market entries - MCE -(Edreams Odigeo).

Themix offered by Barcelona for tech companies is attractive. In addition to the city's world-famous lifestyle, we have noticed positive evolution of criteria deemed crucial to the expansion of internationally known technological hubs such as London, Berlin, or more recently, New York City: support from the administration, leading initiatives (Mobile World Capital for example), public and private incubators and accelerators (SeedRocket, Conector…), first-class business schools and universities, VC firms and business angels investing in local projects, and business service firms (enablers) specializing in entrepreneurship.

However, we must keep in mind that there still is a long way to go. Access to talent, attracting investors, companies and international talents to the city, improving administrative processes, adapting legal and fiscal environments, funding, regulator y environments, are challenges to face with determination in order to keep fuelling the city's tech sector.

Nonetheless, based on facts & figures stated in this report, we think that the sector is on the right path to make Barcelona the number one tech hub in Southern Europe.

We just need to stay determined and bet even more of our efforts on this sector.

Method

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MethodThe present study is based on digital and tech start-ups and companies active in Barcelona.

To develop this study, companies developing and providing products or services through the Internet or using mobile technologies were regarded as companies or start-ups from the digital and tech sector. This definition includes companies developing platforms and tools for web and mobile services. Therefore, companies that are part of the sample belong to the following groups: media, software, e-Commerce, travel&leisure, social networking, gaming, mhealth, edtech, fintech, hardware, telecom and services.

The study is mostly based on data collected during the 2014 Sectoral Survey2 designed by the BARCELONA TECH CITY Sectoral Observatory. The survey, which aims to be a continuous, evolving study of the hub's activity, thrives to find the main activity criteria for start-ups and established companies based in Barcelona, which form the city's hub. Data was collected thanks to public information sources and interviews with companies. 150 companies participated in the study's sample, and the collected data such as revenue and number of employees corresponds to the fiscal year 2014. As collecting information is a difficult process, some company data were estimated based on public information sources and interviews.

It is possible that companies and start-ups likely to have participated in the study turn out to not have taken part in it. For the next instances, we invite and encourage them to be a part of the company sample building Barcelona's tech hub.

The present study was coordinated by Professor Manuel Matés and the CEO of BARCELONA TECH CITY, Miquel Martí. with the participation of the members of the Association's Sectoral Observatory.

2 BARCELONA TECH CITY: Enquesta Sectorial 2014: goo.gl/G2hYPC

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Barcelona Tech City Global partners

Barcelona Tech City Corporate partners

With the special suport from

Acknowledgements

BARCELONA TECH CITY  C/ Escoles Pies, 102  

08017 Barcelona  Tel: 636 293 782 @ecommtech_bcn

@bcntechcity

www.ecommercetechbcn.com www.barcelonatechcity.com

BCNTECHCITY