Spanning biotechnology, advanced manufacturing, energy and emerging technologies, Biscay in Spain's Basque Country is constructing a startup ecosystem rooted in its industrial past. Through coordinated public-private funding, substantial R&D tax breaks and institutional collaboration, the region supports early-stage ventures while working to address scaleup financing gaps and shortages of specialist talent.
Industrial and life sciences foundations
The region hosts over 300 companies, 20 research centres, four universities and leading hospitals, creating an ecosystem that produces more than €9.4 billion in economic output and sustains 62,000 jobs. Life sciences represents a particularly significant sector, with more than 135 companies generating €5.2 billion in revenue and supporting over 27,000 workers—accounting for 45 per cent of all Basque Country life sciences firms and 56 per cent of sectoral revenues. Strengths concentrate in biomanufacturing and advanced therapies.
Ongoing investment flows into biotechnology, aerospace, advanced manufacturing, renewable energy and robotics. A major initiative led by I+Med will channel €72 million over three years, including €28 million for R&D, and is projected to generate more than 600 jobs.
The region's financial incentive structure is competitive. Investors in innovative enterprises receive a 35 per cent personal income tax deduction, while capital gains at exit qualify for a 50 per cent exemption—rising to 100 per cent if reinvested into startups or technology ventures. Relocating professionals from outside Spain can claim a tax exemption on up to 50 per cent of salary for 11 years. Companies access R&D tax deductions reaching 70 per cent and technological innovation deductions of 15–20 per cent.
Infrastructure investments include the Energy Intelligence Centre, Basque Hydrogen Corridor, Automotive Intelligence Centre and Bizkaia Quantum Advanced Industries initiative.
Coordinated institutional support
Olatz Goitia Urkiaga, Director General of economic development agency BEAZ, describes the region's distinguishing characteristic as collaboration between public organisations, each supplying distinct expertise and resources. Beyond BEAZ and Seed Capital Bizkaia, this network includes provincial tax authorities and Lantik, the Provincial Council's technology company. Lantik facilitates access to advanced technological infrastructure including quantum technologies; tax authorities introduce measures to attract businesses and investors; Seed Capital Bizkaia provides financing and investor networks; BEAZ delivers business development and innovation support.
What makes the system work is bringing these organisations together around the needs of companies. These departments don't necessarily work together in the same way elsewhere. Here, we've developed relationships that allow us to coordinate their activities and provide more comprehensive support.
Olatz Goitia Urkiaga
Support follows a staged approach aligned with company development:
- Entrepreneurs can access grants up to €60,000 for idea validation through prototyping, market testing and commercial analysis
- The Creation of Innovative Companies programme provides grants up to €85,000 for incorporation, intellectual property, premises and specialist recruitment
- Seed Capital Bizkaia offers participating loans and equity investment for companies ready to scale
Public-private capital and crowdfunding
Seed Capital Bizkaia was established when few organisations would accept the risks of early-stage investment. According to Director Oscar Ugarte, the model combines public and private capital, with banks serving as both shareholders and co-investors in its funds.
What makes us distinctive is that we combine public and private capital. Banks are among our shareholders, and they also participate as co-investors in our funds.
Oscar Ugarte
The organisation manages investment instruments spanning seed funding, growth capital and social impact, alongside a crowdfunding platform. Seed Capital Bizkaia typically supplies 40 to 50 per cent of funding rounds, with private investors covering the remainder.
Our role is to take risks that other investors might not be prepared to take, while bringing private capital into the ecosystem.
Oscar Ugarte
Ugarte notes the organisation experiments with financing approaches that may appear unconventional for a public institution.
When we speak to other public administrations in Europe, we sometimes realise that we're doing things quite differently. Sometimes we take approaches that might seem unusual for a public institution. But the objective is to respond quickly and provide practical support.
Oscar Ugarte
Crowdfunding and community engagement
Established in 2019, Seed Capital Bizkaia's crowdfunding platform enables ordinary citizens to finance local projects focused on innovative businesses and ventures delivering environmental or social impact. The platform currently emphasises lending, with financing rounds typically between €100,000 and €200,000.
We recently completed a round in just eight minutes. People are waiting for opportunities to invest because they're interested in the projects and the returns.
Oscar Ugarte
Beyond capital raising, the platform introduces residents to innovative companies operating locally that they might otherwise never encounter. Ugarte describes it as combining financial participation, community engagement and local talent promotion.
Industrial innovation and government technology
Biscay's manufacturing base creates opportunities for startups developing technologies for established sectors, particularly energy, automotive and healthcare. Research institutions, hospitals and industrial expertise establish a strong foundation for innovation. Seed Capital Bizkaia typically backs one to three new healthcare projects annually, though biotechnology requires longer investment horizons.
We started supporting health and biotech projects around 30 years ago. We have universities, doctors, researchers and healthcare institutions that provide a strong foundation for innovation.
Oscar Ugarte
A GovTech initiative running for approximately three years encourages startups to develop solutions for public administration. Goitia identifies a primary challenge: shifting how government departments approach procurement and innovation.
Public administrations are accustomed to buying existing products and services. But sometimes those solutions don't meet their needs.
Olatz Goitia Urkiaga
The initiative trains public-sector teams, including procurement staff, to engage differently with innovative companies. Departments identify problems and explore whether startups could develop more effective solutions.
We now identify around three to five public-sector challenges each year. The idea is to give innovative companies opportunities to develop solutions to real problems within public administration.
Olatz Goitia Urkiaga
Scaling challenges and competitive advantages
Supporting early-stage companies remains easier than facilitating scaleup, particularly for ventures moving into industrial production—a challenge shared across Europe.
The challenge comes when they need to scale, particularly when that involves industrial production. That's an area where we still need to strengthen the ecosystem.
Oscar Ugarte
Ugarte argues that Biscay's comparatively affordable talent and research infrastructure provide companies reason to maintain regional operations.
If you compare the cost of operating here with somewhere like Boston, the difference can be significant. Boston has access to enormous amounts of investment capital, but companies also face much higher costs for talent and infrastructure.
Oscar Ugarte
Seed Capital Bizkaia builds international investor relationships through fund-of-funds activities, including investments in funds in Estonia and Portugal, aiming to connect local companies with specialist investors and bring additional capital and expertise into the region.
Attracting and retaining talent
Access to skilled workers represents another priority. Bizkaia Talent, a nonprofit backed by the Provincial Council of Bizkaia and leading Basque companies and universities, works to attract, develop and retain highly skilled professionals. Managing Director Amaia Jugo explains the organisation works closely with employers to understand recruitment needs and supports international professionals considering relocation.
We work with a wide range of businesses, particularly SMEs, which have very different needs. We also help professionals who are considering moving to Bizkaia for work.
Amaia Jugo
Support extends beyond employment to practical matters including housing, schools and other services people require when relocating.
The goal isn't simply to attract professionals to the region, but to help them settle here and encourage them to stay.
Amaia Jugo
The region's industrial economy generates particular demand for specialised technical skills, including industrial automation. Bizkaia Talent develops initiatives connecting employers with qualified professionals from countries such as Colombia and Peru, where skilled workers may face fewer local employment opportunities. The organisation also supports pathways from education into industry through placements allowing international students to gain work experience with local companies.
Sometimes public institutions develop programmes without listening closely enough to the people they're supposed to support. We try to do the opposite.
Amaia Jugo
Woza Labs, a climate tech startup that relocated from London to Bilbao, uses AI-driven climate modelling to help companies such as Iberdrola strengthen electricity grids against extreme weather. Satlantis, an Earth observation company founded in Florida, established its headquarters in Biscay while retaining US operations, providing high-resolution satellite imaging for applications including methane emissions detection.
Startups to watch
Cocoon Bioscience
Founded in 2022 as a spin-off from Spanish biotech company Algenex, Cocoon Bioscience uses insects in their chrysalis stage as natural bioreactors to manufacture proteins. Its CrisBio platform produces recombinant proteins, including enzymes and growth factors used in pharmaceuticals, life sciences and cultivated meat. In September 2024, Cocoon opened a 4,000-square-metre manufacturing facility at the Bizkaia Technology Park in Derio, with initial annual production capacity of five kilograms of recombinant proteins and potential to scale beyond 20 kilograms.
Fisify
Fisify develops digital physiotherapy solutions combining AI with qualified physiotherapist expertise. Its AI-powered virtual physiotherapist, Aurya, uses computer vision to analyse movements, measure range of motion and provide real-time exercise feedback. The platform adapts programmes to user progress while human physiotherapists monitor recovery. Fisify works with businesses, insurers and physiotherapy professionals to improve rehabilitation access and injury prevention.
Gloop
Gloop develops edible alternatives to single-use plastic cutlery, including plant-based spoons, straws and coffee stirrers designed to remain functional during use before being eaten like a biscuit. Straws withstand up to 80 minutes in cold drinks, while spoons remain intact for approximately 20 minutes in ice cream. Products are used in more than 130 establishments, with the company working towards industrial-scale production.
Legit.Health
Legit.Health develops AI-powered technology helping healthcare professionals diagnose, assess and monitor skin conditions. Its platform analyses photographs to identify more than 300 conditions, including psoriasis, eczema, acne and potentially malignant lesions, while measuring disease severity and monitoring treatment progress. The technology supports earlier intervention, improves dermatological care access and reduces administrative workloads. Customers and partners include Sanitas, Cigna and Spain's public healthcare services.
Protellix
Protellix, a biotechnology startup based in Derio, Biscay, develops AI-powered technology for protein and enzyme engineering. Launched in October 2026 as a spin-off from CIC bioGUNE, the company was founded by computational chemistry researcher Gonzalo Jiménez-Osés and biotechnology entrepreneur Juan Pablo de Giacomi. It combines AI, physics-based molecular simulations and laboratory testing to design proteins more efficiently, with applications in therapeutic proteins, industrial enzymes and molecular binding technologies.
Source: Tech.eu
