Investment by business angels in deals of up to €5 million grew by 16.3% in Spain in 2025.
This is one of the key findings of the report “Angel Investment in Startups: Evolution, Activity and Trends”, presented this week by the Spanish Association of Business Angels (AEBAN) together with IESE Business School as part of the AEBAN 2026 Congress held in Girona.
The study reveals a paradox in 2025: although total investment volume in Spain showed resilience—with a limited decline of 2.8% compared to 2024—the number of very early-stage transactions (tickets below €1 million) fell by 18.5%. This trend reflects how capital is increasingly concentrating in companies with already validated business models, raising the bar for new entrepreneurs.
The report also highlights that more than 80% of deployed capital was concentrated in funding rounds between €1 million and €5 million, underlining “a greater sophistication of the market and larger-scale transactions”.
Despite the market’s investment capacity, tensions persist in early-stage financing. Total startup investment in Spain reached €3.1149 billion at the end of 2025, although 44% of the capital was concentrated in just 15 large transactions exceeding €50 million, according to SpainCap data.
The authors of the report stress that the ecosystem’s challenge is no longer solely to increase overall investment volume, “but to ensure that a greater number of startups successfully progress toward growth stages”.
A dual market and a transforming ecosystem
The report identifies a dual market between growth and base segments, where strong capital concentration coexists with reduced dynamism in early stages. This evolution confirms a shift of capital toward more mature companies within the entrepreneurial lifecycle.
Among the main challenges facing the sector is the weakness of liquidity and exit mechanisms. In 2025, only 19 IPOs of venture capital-backed startups were recorded in Europe, while in Spain exit transactions amounted to 49 deals, far from the peak of 80 reached in 2022.
The average holding period of portfolio companies has reached 5.6 years, and nearly one in two companies that, due to their maturity, should have exited the portfolio, remain invested—reflecting “the current sluggishness of exit mechanisms”.
Faced with this situation, business angels are increasingly turning to secondary transactions—selling stakes to other funds—as a way to recover capital and reinvest it in new projects.
Fragmentation in Europe, AI concentration and structural change
Venture capital investment in Europe reached €58.7 billion in 2025, up 4.5% year-on-year, although accompanied by a 17% decline in the number of transactions.
The report highlights developments in early-stage segments: investment in pre-seed, seed, and early-stage rounds fell by 16.4%, while the number of transactions dropped by 21.1%, extending a multi-year downward trend. “This indicates that many startups are now finding it more difficult to access their first funding rounds, precisely at the stage where business angel support is most critical,” the study notes.
At the same time, Artificial Intelligence and Machine Learning have become the dominant growth sectors. In Europe, these technologies attracted €23.5 billion in 2025, representing 35.5% of total investment. The report even warns of a potential “crowding-out” effect for projects that do not integrate these technologies into their value proposition.
In Spain, the document notes a strong base of early-stage companies and the ability to deploy small and mid-sized tickets, “but there is a lack of continuity in Series A and, above all, in larger growth rounds”.
Another key finding is the strong concentration of capital in specific sectors, particularly artificial intelligence, reinforcing the polarisation of the European market.
For Spain, this European context “also opens a strategic opportunity”, as reduced barriers and greater integration could enable Spanish business angels to participate more easily in cross-border deals and attract foreign co-investment into high-potential Spanish startups.
Calls to the public sector and institutional vision
The AEBAN Board has called on public authorities, stating that “the fiscal framework has not evolved at the same pace as the market”. The association is calling for current tax incentives under the Startup Law to be expanded so they are no longer limited to individuals and instead extended to co-investment vehicles, now considered a key tool for sector professionalisation.
“From AEBAN, we believe Europe needs to move toward a entrepreneurial competitiveness agenda based on four pillars: greater market integration, increased pan-European co-investment, improved liquidity pathways, and more harmonised regulatory frameworks,” said AEBAN President Marta Huidobro.
About AEBAN
AEBAN is the Spanish Association of Business Angels Networks, established in 2008. It represents 31 networks and nearly 2,000 investors across Spain, with the mission of promoting private capital investment in early-stage companies
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