The European startup ecosystem has seen a significant drop in valuations since the bullish period of 2021-2022, particularly impacting startups in the region. However, in the Southern part of Europe, this correction has worked in favor of startups, offering lower operating costs and more reasonable valuations.
This trend was evident at the Mobile World Congress in Barcelona, where Northern European VCs were actively scouting for startups in Spain and Portugal. These startups present an attractive combination for VCs due to their cost efficiency and valuation levels.
Adding to this Southern trend is the launch of a new Venture Capital fund, Plus Partners, by Enrique Linares and Oriol Juncosa, both with impressive backgrounds in the startup and VC scene. The fund is rumored to be in the range of $30M-$50M and will focus on pre-seed and seed-stage startups in Southern Europe, particularly Spain.
The fund’s focus areas include ‘health and nutrition’, ‘finance and property’, and ‘future of work and productivity’. Plus Partners aims to fill the gap for professionally run VC funds in a region where early-stage investors have sometimes caused more harm than good.
According to Juncosa, Southern Europe has strong entrepreneurial cities like Barcelona, Madrid, and Lisbon, with Barcelona historically leading the tech landscape. However, Madrid and Lisbon have caught up, offering entrepreneurs a choice in setting up their companies.
Linares and Juncosa emphasized the wealth of talent in Southern Europe that can drive successful startups internationally. The fund will also consider startups from Italy to complete its Southern Europe investment strategy.
Plus Partners joins a growing trend of VCs focusing on Southern Europe, with new funds like Yellow and Kfund investing in the region. Spanish startups have shown significant growth, with reports indicating a total enterprise value exceeding €100 billion and strong venture investment activity in recent years.
The European Investment Bank’s commitment to investing €1B in growth-stage tech startups further highlights the increasing interest and potential of the tech ecosystem in Southern Europe.
