Business Angel Investment in Spain: A 2025 Overview
Investment by business angels in Spain has seen a notable increase, with deals of up to €5 million growing by 16.3% in 2025. This surge is highlighted in the recent report titled “Angel Investment in Startups: Evolution, Activity and Trends,” presented by the Spanish Association of Business Angels (AEBAN) in collaboration with IESE Business School during the AEBAN 2026 Congress in Girona.
Key Findings from the Report
One of the most striking revelations from the report is the paradox of 2025: while the total investment volume in Spain remained relatively stable, showing only a 2.8% decline compared to 2024, the number of very early-stage transactions—those under €1 million—plummeted by 18.5%. This trend indicates a growing preference among investors for companies with validated business models, which raises the bar for new entrepreneurs seeking funding.
Concentration of Capital
The report underscores that over 80% of the capital deployed was concentrated in funding rounds between €1 million and €5 million. This shift points to a more sophisticated market where larger-scale transactions are becoming the norm. Despite the overall investment capacity, early-stage financing remains fraught with challenges. By the end of 2025, total startup investment in Spain reached €3.1149 billion, yet a staggering 44% of this capital was funneled into just 15 large transactions exceeding €50 million.
Challenges in the Ecosystem
The authors of the report emphasize that the challenge for the ecosystem has evolved. It is no longer just about increasing the overall investment volume; the focus has shifted to ensuring that a greater number of startups can successfully transition to growth stages. This dual market dynamic—where strong capital concentration exists alongside reduced dynamism in early stages—reflects a significant transformation in the entrepreneurial landscape.
Liquidity and Exit Mechanisms
One of the primary challenges facing the sector is the weakness of liquidity and exit mechanisms. In 2025, Europe recorded only 19 IPOs of venture capital-backed startups, while Spain saw 49 exit transactions, a significant drop from the peak of 80 in 2022. The average holding period for portfolio companies has now reached 5.6 years, with nearly half of the companies that should have exited remaining invested, highlighting the sluggishness of exit mechanisms.
In response to these challenges, business angels are increasingly resorting to secondary transactions—selling stakes to other funds—as a strategy to recover capital and reinvest in new projects.
Fragmentation and Sector Concentration
Venture capital investment across Europe reached €58.7 billion in 2025, marking a 4.5% year-on-year increase, albeit accompanied by a 17% decline in the number of transactions. The report notes a concerning trend in early-stage segments: investment in pre-seed, seed, and early-stage rounds fell by 16.4%, with the number of transactions dropping by 21.1%. This trend suggests that many startups are facing greater difficulties in securing their initial funding rounds, a critical stage where business angel support is essential.
Conversely, sectors like Artificial Intelligence and Machine Learning have emerged as dominant growth areas, attracting €23.5 billion in 2025—representing 35.5% of total investment. The report warns of a potential “crowding-out” effect for projects that do not incorporate these technologies into their value propositions.
Opportunities for Spanish Startups
In Spain, while there is a robust base of early-stage companies and the capacity to deploy small and mid-sized tickets, there is a noticeable lack of continuity in Series A and larger growth rounds. The concentration of capital in specific sectors, particularly AI, further polarizes the European market. However, this context also presents a strategic opportunity for Spain. Reduced barriers and greater integration could facilitate Spanish business angels’ participation in cross-border deals and attract foreign co-investment into high-potential Spanish startups.
Calls for Public Sector Support
The AEBAN Board has made a clarion call to public authorities, asserting that the fiscal framework has not evolved in tandem with the market. They advocate for the expansion of current tax incentives under the Startup Law, suggesting that these should extend beyond individuals to include co-investment vehicles, which are increasingly seen as vital for professionalizing the sector.
AEBAN President Marta Huidobro emphasizes the need for Europe to adopt an entrepreneurial competitiveness agenda based on four pillars: enhanced market integration, increased pan-European co-investment, improved liquidity pathways, and more harmonized regulatory frameworks.
About AEBAN
The Spanish Association of Business Angels Networks (AEBAN), established in 2008, represents 31 networks and nearly 2,000 investors across Spain. Its mission is to promote private capital investment in early-stage companies, fostering a vibrant entrepreneurial ecosystem.
For more information, visit AEBAN’s official website.
