Madrid, Spain – Spanish small- and medium-size enterprises (SMEs) are displaying resilience as they continue to make strides in economic recovery, according to the latest report by CESGAR. The 14th annual SME Financing in Spain report highlights a nation now housing 3.5 million SMEs, constituting over 99% of the total business landscape. However, a significant 95.4% of these businesses employ ten or fewer individuals, with more than half operating as freelancers or one-person entities.
The report reveals that the majority of these SMEs, about 76%, are service-based, with the Business Services sector alone witnessing the addition of over 20,000 new companies in 2024. Conversely, traditional sectors such as trade and manufacturing have experienced a decline. Despite these growth figures, Spain’s SME economy remains largely local, with only 9.1% engaging in export activities, a slight decrease from 9.7% in 2023. Of those that do export, most contribute a mere 1% to 20% of their total output to foreign markets.
In terms of innovation, the report indicates a downturn, with the percentage of companies involved in R&D activities dropping from 20.1% in 2016 to 11.3% in 2024, following a brief increase in 2023. Nonetheless, financial stability appears to be on the upswing, as debt levels have decreased, and financial expenses rose minimally in 2024 compared to a more substantial increase the previous year. Notably, nearly 21% of SMEs reported growth and improved balance sheets, a rise from the prior year, while the proportion of businesses with declining revenue has fallen to just 2.2%.
Investment in Spanish startups is showing positive trends, with a 36% increase in funding to €3.1 billion in 2024, as per Bankinter’s Investment Trends in Startups survey. However, these investments primarily targeted “mature companies” with larger funding rounds. The average fundraising amount approached €10 million, with companies like SeQura, Zunder, and Boopos leading with substantial investments.
Despite increased funding, profitability remains a challenge for some SMEs. The CESGAR report highlights that while revenues have increased, rising costs in areas such as labor, energy, and supplies have strained profit margins across various sectors. Yet, optimism prevails, with over 43% of SMEs forecasting revenue growth in 2025, a notable rise from 37.7% last year. The number of SMEs predicting significant growth has almost doubled, and only 12.4% expect a drop in sales this year, down from 19.2% in 2024.
The Spanish government has been proactive in fostering the SME innovation ecosystem through initiatives like the 2022 Startup Law, the Spain Startup Entrepreneurial Nation plan, and the Acelera Startups program by the EOI Business School. This program, in collaboration with leading accelerators such as ISDI’s IMPACT Accelerator, NTT Data Spain, and Wayra, offered a fully subsidized acceleration program for startups between 2023 and recently.
As global capital continues to seek scalable opportunities, Spain’s startup ecosystem is positioned for growth, although further efforts are needed to activate all potential growth levers.
