Amazon, Airbnb, and WeWork: Why So Many Tech Giants Are Setting Up Shop in Barcelona
As Spain’s Catalonia pushes toward independence, Barcelona—one of the most-wired cities in the world and longtime host of the largest mobile tech conference worldwide, Mobile World Congress —is ready to become a tech capital.
Miquel Martí, CEO of Barcelona Tech City, organizer of startup incubator Pier 01, makes the usual San Francisco comparisons but with a twist: “We’re also the Miami of Europe, the gateway to the Spanish-speaking world.”
There are 400 million native Spanish speakers globally—more than native Arabic, French-Canadian, and Japanese combined. Pier 01 itself is expected to jump next year from its current 1,000 residents to approximately 2,500, says Martí.
That hustle comes amid the bustle of a $1.5 billion startup scene, driven by Pier 01’s $587 million in investment funding but buoyed by some of the tech sector’s biggest names and most blueblood blue chips—all piled on top of a significantly lower cost of living with a breezy bohemian flavor influenced heavily by native sons Salvador Dalí, Antoni Gaudí, Joan Miró, and Pablo Picasso. It’s easy to see why Spain is reluctant to say adiós to the Catalan haven and why the world’s tech giants are eager to say hello in any language they can.
Airbnb has a hot-and-cold relationship with the city, which requires Airbnb hosts to have hard-to-obtain tourism licenses. Under the threat of a ban earlier this year, Airbnb recalled 1,043 illegal spots from its database—which jumped from 11,000 in 2014 to 20,000 now—and offered free lodging to survivors of the terrorist attack this summer. But the city is still pushing a $704,000 fine. Barcelona is a tourism jewel as the city’s 1.7 million residents last year saw 8 million foreign visitors—900,000 of whom used Airbnb.
This year, the Seattle-headquartered company opened a $35 million airport warehouse devoted to Amazon Fulfillment, its third-party shipping service. It expects to have 1,500 workers by 2020. Amazon (AMZN) also announced this past spring that it intends to add 500 more jobs by 2019 with a seller support hub.
Since 2012, the venture builder has launched 14 digital businesses in eight countries, with hubs in Bogota, Buenos Aires, Lima, Mexico City, and Santiago. It also manages a $47 million marketing inventory. The CEO has also co-founded other upstarts, like Wallapop. (See below.)
Touting skills for location data analysis, and visualization, CartoDB counts Amtrak, AXA, Deloitte, Google Trends, Mexico City, the U.S. National Park Service, New York City, the Royal Bank of Scotland, and Twitter (TWTR) among its clients. It recently tripled its adoption rate and scored $23 million in Series B funding from Accel and Salesforce Ventures.
Last year, French rival Vente-Privee bought Privalia for $588 million in Barcelona’s biggest-ever exit. The Spanish flash-sale company held top rankings in Brazil, Mexico, and Spain. (In 2015, it scored $488 million in sales.) Privalia had achieved that stature on only $189 million in six rounds of funding, making the ROI sizable.
In 2014, Scytl, an online voting company born at the Autonomous University of Barcelona, received $91 million in a Series C round—half of which came from New York City’s Vulcan Capital—and has handled almost 400 elections in 25 countries. But after the 2016 U.S. election, it halted plans to IPO this year, citing concerns that it would lose its independence if it were tied to stakeholders in a specific country (hi, Russia!) or, say, Facebook (FB) or Google (GOOGL).
It’s the Kayak for those flyers and catalogues you get with the Sunday newspaper or in junk mail, digitizing them to maximize comparison shopping. Tiendeo launched an expansion in Japan, but already claims 4 million downloads and 17 million monthly users since launching in 2011.
A second-hand trading app, $43 million of investment and 11 million users in its first two years of existence got investors and analysts talking about Wallapop’s chances as a Spanish unicorn. It purchased New York-based Sell It to branch into the U.S., but keeps costs low with only 80 employees.
WeWork’s arrival in Barcelona this winter is meant to take notice by design as it grabs prime real estate in a golden tower in Barcelona’s District 22@ innovation neighborhood. Its next-door neighbor (in a silver tower) is Amazon. It’s an especially tantalizing office for lean entrepreneurs given that monthly cost of living in Barcelona is $2,854, about half that of New York or San Francisco.