Building Sustainable Startup Ecosystems: Insights from South Summit Madrid 2026

An investor speaks with a startup founder during the South Summit Madrid 2026 in Madrid, Spain. Global venture capital leaders at the event called for greater support for homegrown startups in emerging markets. — SOUTH SUMMIT

By Arjay L. Balinbin, Associate Editor

The Call for Local Investment

In the vibrant atmosphere of Madrid, global investors gathered at the South Summit Madrid 2026 to discuss the future of startup ecosystems. A key takeaway from the event was the urgent need for local investors to prioritize homegrown companies. Lucy Chow, an influential investor and ecosystem builder from the UAE, emphasized that local capital is essential for nurturing startups into globally competitive businesses.

“Please keep some of your capital for your backyard,” Chow urged during a media roundtable. Her message resonated with many attendees, highlighting the importance of investing in local talent and innovation rather than funneling resources exclusively into established tech hubs like Silicon Valley.

The Importance of Early-Stage Funding

Chow’s insights shed light on a critical aspect of startup success: the role of early-stage funding. She pointed out that without local investors willing to write the initial checks, the chances of achieving significant exits diminish. “You’re not going to get those exits unless you have the first checks written by people who know the ecosystem the best,” she stated. This perspective is particularly relevant for countries aiming to cultivate their own entrepreneurial landscapes.

Her comments were particularly poignant in the context of the Middle East and North Africa (MENA) region, where venture capital activity has surged in recent years, especially in the UAE and Saudi Arabia. The region serves as a testament to the potential of local investment in fostering innovation and economic growth.

The Evolution of Investment Processes

As the conversation shifted towards the mechanics of investment, Jörg Goschin, CEO of Germany-based KfW Capital, highlighted how technological advancements are reshaping the venture capital landscape. He noted that the investment decision-making process has evolved significantly over the past decade, primarily due to the increasing reliance on data, specialization, and artificial intelligence (AI).

“We’re starting with more data points,” Goschin explained, indicating that today’s investors have access to a wealth of information that was previously unavailable. This shift has led to a more specialized approach, with funds focusing on narrower sectors and technologies than in the past.

The Role of AI in Due Diligence

AI is playing a transformative role in how venture capital firms conduct due diligence. Tasks that once required analysts to spend days sifting through documents can now be completed in a fraction of the time using AI tools. “When you start an investment process, you usually start with a data room,” Goschin elaborated, emphasizing the efficiency gains brought about by technology.

Despite these advancements, the fundamental principles of venture capital remain unchanged. Renaud Visage, co-founder and general partner at Slate VC, reiterated that investors are still on the lookout for exceptional teams capable of building great companies in favorable markets. “What’s changed is the bar,” he noted, indicating that expectations for founders have risen significantly.

The Rising Expectations for Founders

In today’s competitive landscape, founders are expected to be more experienced and financially savvy. Visage pointed out that the bar is continually rising as competition becomes increasingly global. This shift necessitates that entrepreneurs not only have innovative ideas but also the skills to scale their businesses effectively.

Chow echoed this sentiment, asserting that while AI and data analytics are becoming integral to investment strategies, the human element remains irreplaceable. “Ultimately, though, the decision is still going to be that in-person, face-to-face decision,” she remarked, underscoring the importance of personal connections in the investment process.

Integrating ESG Considerations

Another significant trend discussed at the summit was the growing importance of environmental, social, and governance (ESG) considerations in investment frameworks. Goschin noted that ESG factors have become more deeply integrated into the investment process over the past decade, serving as a risk management tool for investors. “Certainly, having ESG structurally integrated into the investment process is something which wasn’t there like 10 years ago,” he explained.

This integration reflects a broader shift in the investment landscape, where ethical considerations are increasingly influencing decision-making. Investors are now more aware of the long-term implications of their investments, not just in terms of financial returns but also in terms of societal impact.

The discussions at South Summit Madrid 2026 highlighted the critical role of local investment in building sustainable startup ecosystems. As the landscape continues to evolve, the interplay between technology, human judgment, and ethical considerations will shape the future of venture capital and entrepreneurship worldwide.