Local founders are building globally relevant companies in an environment shaped by strong public–private collaboration, top-tier business schools, and a growing base of international talent. Madrid is channeling its open, fast-paced, and full-of-character identity into an energetic startup landscape.

With a metropolitan population of 6.8 million in 2025, Madrid is the third-largest urban region in the EU (behind London and Paris). Its GDP of €293 billion (~$327 billion) accounts for 14.2 % of Spain’s national output and places it second among EU metros by economic size.

A thriving deeptech and green innovation center

Madrid won the Eurocities Award 2024, which celebrates cities that are building green, resilient and just futures for all, for its outstanding commitment to tackling global challenges in the “Innovation Ecosystems: Attracting and Retaining Talent” category. The jury highlighted the city’s Center for Innovation in the Circular Economy (launched in 2022) for fostering innovation and supporting entrepreneurship that embraces sustainability and helps to reduce waste. The Center for Innovation, a public-private hub, brings together startups, universities and municipalities to pilot solutions in waste reduction, material reuse and sustainable production.

Beyond its green transition, the region has also emerged as a national tech leader, home to more than 2,100 startups and generating 21,000 jobs over the past decade. In only the first half of 2025, Madrid attracted €806 million (~$900 million) in venture capital, outpacing Barcelona’s €690 million (~$770 million) and underscoring its growing appeal for founders and investors alike. The city powers a top-tier technical workforce, ranking third in Europe for application development and AI talent in 2025. 

‍

Institutional stability and government transparency

Madrid provides strong backing for entrepreneurial growth through a €40 million (~$45 million) guarantee facility cofunded by the European Investment Fund and Spain’s ENISA, aimed at easing financing for innovative SMEs. The city is home to the headquarters of Telefónica, Iberia and BBVA, as well as international organizations like the UN World Tourism Organization and the Ibero‑American General Secretariat. 

The region also benefits from high governance transparency, a crucial factor for entrepreneurs navigating public-private partnerships, procurement or compliance. This is reflected in Madrid’s A- credit rating from Fitch (2025), which highlights the city’s sound fiscal management, predictable regulatory framework and institutional stability. Oversight is maintained through bodies such as Spain’s Council for Transparency and Good Governance, which enforces access to public information and monitors public sector accountability. 

Dealroom data ranks Madrid as the fifth largest and tenth most active ecosystem in Western  Europe. It is also the first most active ecosystem nationally and forty-eighth globally, with a total value of €25 billion (~28 billion) in 2025 and €3 billion (~$3.3 billion) in startup funding raised since 2022. 

Academic strength

Seventeen universities call Madrid home, including major public institutions such as the Complutense University of Madrid, the Autonomous University of Madrid and the Technical University of Madrid and specialized private universities such as Comillas Pontifical and CEU San Pablo. These institutions collectively produce a robust graduate pipeline in engineering, AI, biotech and business: over 40,000 graduate degrees annually. The region also hosts more than 40 research institutes promoting science-based entrepreneurship, including IMDEA Nanoscience, IMDEA Energy and IMDEA Food as part of the Startup Radar madri+d platform, as well as prominent public research bodies such as CIEMAT, CSIC and Instituto de Salud Carlos III. 

Infrastructure built for scale and connectivity

Madrid serves as a strategic gateway to Latin America, Europe and beyond. Madrid–Barajas Airport handled 66 million passengers in 2024, including over 3.2 million seats on routes to Latin America via Iberia alone. A world-class railway hub and high-speed AVE lines link the city seamlessly to Barcelona, Seville, Málaga and France. Its Metro network, the third-largest in Europe, charts over 300 stations across 12 lines, complemented by robust bus and Cercanías suburban rail services.

Public-private alignment and startup support

Madrid’s growth is rooted in coordinated governance and ecosystem alignment. The South Summit (southsummit.io), now in its 14th edition, has become one of Europe’s foremost platforms for entrepreneurial deal-making, drawing 40,000 participants, 140 international investors and 17 unicorns and generating €39 million (~$44 million) in local economic impact in the 2025 edition. Cohosted by local, regional and national authorities, it reflects the city’s policy coherence, advancing startup-friendly frameworks such as the Zero Social Security Contributions Plan, which waives social security contributions for first-time self-employed workers during their initial 12 months; and Spain’s national Startup Law, enacted in 2023 to streamline visa processes, which cut corporate tax from 25% to 15% for early-stage startups and introduce tax incentives for stock options and investment. 

This top-down alignment is mirrored in one of the largest European corporate ecosystem infrastructures: Telefónica-backed Wayra, the corporate venture capital (CVC) arm of Telefónica, one of Europe’s largest telecom companies, continues to invest across AI and connectivity; and vertical accelerators such as IMPACT (originally backed by the European Commission and focusing on deeptech and digital innovation), TrenLab (Renfe’s open innovation hub linking mobility startups to Spain’s national rail operator) and Tenity (a global fintech accelerator with public and corporate partners) connect early-stage startups to corporate networks and capital. Even flagship public initiatives (such as Deeptech Madrid, ESA BIC Madrid Region and healthStart of the Community of Madrid through the madri+d Foundation) and leading incubators of the Madrid City Council (such as Madrid Emprende and La Nave, as well as Madrid’s circular-economy hub) stem from long-term municipal strategy rather than NGO advocacy, underscoring the city’s integrated public-sector leadership in entrepreneurship.

Culture and scale

Madrid balances ambition with livability. The city pairs a cost-effective talent market with vibrant neighborhoods such as Malasaña and Lavapiés, cultural incubators that double as startup scenes. It has emerged as a center for mobility tech, fintech, AI and industrial digitization. For founders, this means access to booming sectors, strong financing channels, high-quality urban life and a global business mindset rooted in Spanish and Latin American markets.

‍