Spain’s copycat startups: disgrace or acquire? | Sifted

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Spain’s copycat startups: shame or gain? | Sifted


Many take a look at the rapidly-growing Spanish startup ecosystem with admiration. There’s extra enterprise capital funding, extra “unicorn” tech startups and extra folks selecting to be entrepreneurs than ever earlier than. 

However others now take a extra sceptical view. Is the ecosystem actually that progressive? Or is it simply adept at copying startups from different elements of the world? Might Spain quickly get a status because the Rocket Web of Europe?

Take Glovo and Cabify, that are presently the one Spanish startups valued at greater than €1bn and the 2 most lauded of the native tech firms. How progressive are they? Glovo was based two years after the German courier service DeliveryHero, whereas Cabify got here two years after ride-hailing rival Uber. They now have a lot to distinguish them, however they weren’t precisely first to the get together. 

Commercial

It’s a fear that you just hear talked about whenever you communicate to funding analysts in Spain. Many new Spanish startups, it’s stated, try to duplicate enterprise fashions from US or Northern European rivals, and making use of them to southern European and Latin American markets.

However is that this true? And in that case, is it an issue for the Spanish startup ecosystem, or truly an indication of entrepreneurial spirit?

“If you wish to go into high-tech, don’t go to Spain”

One man who thinks this can be a downside in Spain is Al Costa, founding father of Tekntrash: a startup that makes use of synthetic intelligence to assemble information on product lifecycles. 

He believes that Spain is caught in a cycle of conservative investing, making it troublesome for progressive, data-driven firms to flourish. 

“Traders there simply put money into “copycat” fashions,” he says. “In Spain buyers will attempt to combine oil and water when it comes to attempting to be an investor and minimising threat. I bear in mind talking to an investor who stated, ‘I’m an investor however I don’t put money into R&D’”

For Costa, this was sufficient to make him depart Spain and relocate to the UK in January, two years after founding Tekntrash.

Al Costa, founding father of Tekntrash on the white cliffs of Dover

“I attempted to search for buyers in Spain however I came upon to my amazement that they had been all asking the incorrect questions. Clearly they’d no understanding in regards to the worth of knowledge,” he argues. “If you wish to go into high-tech, don’t go to Spain, come to the UK.”

This sample of investing, says Costa, comes with a severe long-term threat that Spain will battle to compete with different nations on the subject of progressive applied sciences sooner or later: “Spain as a rustic will lack in expertise, it is going to lack in innovation, and that’s worrisome,” 

Take a look at the small print

Others within the Spanish startup world, nevertheless, imagine that view is outdated.

“I believe that could possibly be true 10 years in the past nevertheless it isn’t at the moment,” says Miguel Vicente, cofounder of Antai Enterprise Builder and Barcelona Tech Metropolis. “These days, Spanish entrepreneurs launch companies which are progressive and wish to be world from the start, and that’s why there’s quite a lot of funding coming from European funds, to Spanish startups.”

He additionally takes difficulty with the declare that replicating a enterprise mannequin and innovation are mutually unique.

“I don’t have something in opposition to replication and I don’t assume it lacks innovation. Concepts are there and essentially the most key issue to success isn’t the concept itself, it’s the execution,” he says.

Miguel Vicente, cofounder of Antai Enterprise Builder and Barcelona Tech Metropolis

Vicente remembers his first expertise of founding a startup, the couponing enterprise LetsBonus which he launched from Barcelona in 2008.

“I used to be replicating Groupon however I executed it otherwise, opening different verticals, a special expertise and completely different strategy to clients,” he says.

Vicente additionally factors to digital medical health insurance startup Elma Care, an organization within the Antai Enterprise Builder portfolio, as proof that copycat enterprise fashions are hardly ever a real carbon copy.

“You possibly can say that’s a replication of Oscar within the US, however in actuality whenever you take a look at the small print, the corporate was utterly completely different, because of the regulatory and market variations,” he says. “If you take a look at the small print, native components imply that companies function in another way.”

The Spanish Klarna

One other Spain-based entrepreneur who feels utterly snug with enterprise mannequin replication is David Bäckström, founder and chief government of fintech startup SeQura, which has beforehand been dubbed “the Spanish Klarna”.

Bäckström remembers discovering Klarna when advising a London-based good friend on his portfolio firms.

“I noticed this Klarna mannequin and I used to be simply considering, ‘This sort of enterprise mannequin, however applied in additional risky markets like southern Europe, would make quite a lot of sense as a result of it will drive far more enterprise worth than in Northern European international locations,’” he says.

Bäckström made no bones about following Klarna’s lead when launching SeQura in 2014, as he went about recruiting the crew.

“The very first thing I did once I assembled the crew, I recruited folks from Klarna, you understand to get a little bit of the insights. I mixed it with people who find themselves good on Spanish commerce and the Spanish context,” he says.

David Bäckström, founder and chief government at SeQura

Bäckström has no real interest in competing with Klarna in northern European markets, however believes that his crew is including worth, by making the “purchase now pay later” mannequin work for patrons in much less secure contexts like southern Europe and Latin America.

“We’d by no means go into the Anglo Saxon markets as a result of there are a good quantity of very, superb gamers doing an excellent job there,” he explains. “In our case, what we developed is a mannequin that makes it sustainable with a lot increased default charges than in northern Europe, and the way we’ve completed that with pricing and construction, that’s the innovation.”

Innovation occurs on the within

And on the subject of criticisms that replicating a enterprise mannequin isn’t innovation within the truest sense, Bäckström says that have has taught him in any other case. 

Earlier than founding SeQura, Bäckström launched European Telemedicine Clinic, a pioneering telehealth platform, which gained a European Union award for innovation.

“Is it nicer to have invented one thing?” he asks. “In my case, that is my fourth firm and in the event you’d requested me perhaps 20 years in the past, I might need been a bit prouder about being this sort of innovator.” 

Trying again, Bäckström believes that whereas the expertise behind European Telemedicine Clinic was leading edge, the actual success of the undertaking lay with much less glamorous sides of the enterprise, like recruiting docs to the platform.

“I believe it’s very simple to take a look at a enterprise from the surface and assume, ‘That’s innovation,’ ‘That’s not innovation.’ However on the finish of the day, innovation is loads about execution,” he concludes.

SeQura is projecting revenues of €40m in 2020, and a current Kaleido report estimates that world spending on “purchase now pay later” will attain $680bn this yr, double the determine in 2019.

And whereas Spain might need some catching as much as do on the subject of deep tech success tales, the image is actually altering. 

Main Spanish funds like Seaya Ventures and Adara Ventures are more and more specializing in enterprise fashions incorporating synthetic intelligence and robotics, and startups like OnTruck, Carto and Pink Factors are already proving Spain’s potential to provide top quality, excessive tech firms.

And on the subject of replicating enterprise fashions for the southern European or Latin American context, entrepreneurs behind these firms would let you know they’re simply doing what any entrepreneur does: seeing a niche and including worth. 

Is that innovation? We’ll depart that as much as you.

Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith



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