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The Spanish sector of the “startups.” sees that the new mentality focuses on profitability and turnover

The heads of Spanish-owned companies have found that in recent years, since before the pandemic, there has been a paradigm shift in the sector that has gone from companies that grew fast and obtained funding in the form of rounds due to their theoretical potential to a scenario in which the scalability and financial attraction of these companies is measured by their profitability and billing numbers.

In this sense, they have pointed out that the capital firms (the “venture capital”, in the jargon of the sector) no longer fully enter projects that do not objectively demonstrate, in terms of profitability and billing, their potential for scalability.

In this regard, they stressed that, following the covid crisis, there was an increase in the creation of start-ups and investment operations, resulting in 2022 that closed with 3.5 billion euros invested after the record of 4.3 billion reached in 2021.

Since then, however, investment operations have generally slowed as a result of high inflation rates, the economic slowdown and, in particular, aggressive interest rate rises, which have significantly increased funding costs compared to the time when interest rates were negative.

In this paradigm shift, the actors in the sector such as Bosco Gonzáles of BCAS have spoken, which has pointed out that changing the mentality towards billing rather than seeking investment can be a viable strategy, but requires a strong focus on profitability and careful financial planning.

On his side, Felix Martín, from Alquindoi, has pointed out that the problem of this model is that it is not always clear that the company, in the long term, can be self-sustaining and has found that, given the experience, investors are raising the need to redirect towards models that are based on a solid and stable operational base before climbing.

Raising funds is used to cover the costs necessary to grow, but the goal is always to bill and marginalize, he added, while Nacho Requena, of Room007, has commented that both growth in capital inflows and growth by expansion should go to the same.

For his part, David Gonzalez, of Depencare, has argued that you can’t, or shouldn’t, create a startup to go round-trick; funding has a function, it should help you get where you wouldn’t get there naturally, but it shouldn’t be a way of subsistence.

In a similar line, Mateo Cusi of Urban Air Purifier (UAP) moves, who thinks that, as far as possible, work with own resources and the focus is to generate sales; being invested can distort the focus of your idea.

Original Article Here