• Madrid Investment Attraction

Rodrigo García de la Cruz, CEO of Finnovating: “Public-private collaboration attracts companies interested in Madrid”

The technology services platform Finnovating has built a global community comprising more than 20,000 startups, companies, and institutions, facilitating connections among them. It’s worth noting that Finnovating was the sole Spanish company to make it to the recent list of the  world’s top 200 fintech companies, a ranking compiled by Statista and CNBC.

In light of this recognition, we had the opportunity to speak with its founder and CEO, Rodrigo García de la Cruz. Beyond shedding light on the platform’s operations, García de la Cruz also elaborates on Finnovating’s role as Madrid Investment Attraction’s agency dedicated to drawing companies and investments from the fintech sector.

 M.I.A.: What is Finnovating? When was it founded, and how many companies are registered on the platform?

R.G.: Finnovating was established two and a half years ago. Its objective is to emulate LinkedIn but for technology companies, creating a global community where they can connect, sell their services, expand their reach, and engage in collaborative innovation or scaling projects.

In this thriving community, we now have over 22,000 registered companies from 130 different countries. We’ve provided a digital space for them to establish connections with service providers and institutions. Our collaboration with Madrid serves the purpose of helping international companies looking to enter the Spanish market by linking them to the City Council’s soft-landing service.

M.I.A.: How did you manage to attract these 22,000 companies?

 R.G.: That’s a great question. I come from the world of technology and the financial sector. From there, I ventured into fintech. I initially set up an investment vehicle, followed by the Insurtech Association and then the Ibero-American Fintech Association, which encompasses all fintech companies in Spain, Portugal, and Latin America. Through these initiatives and events where we brought CEOs and founders from around the world, we managed to build a community of over 3,000 companies.

We established the platform to scale these connections beyond just events or webinars. Afterward, we launched international recruitment campaigns. Word of mouth also works for us. We have companies from India, the United States, Europe, and Latin America..

M.I.A.: You mentioned scaling connections. How do you measure the success of these connections?

 R.G.: We have three types of companies: startups, corporations, and public institutions. Startups are seeking investors, opportunities to sell their products, and international growth, often in collaboration with public institutions. What do large corporations want? They’re looking for technological solutions to digitize their operations or embark on innovation projects. And investors are looking for promising companies. This is the triangle of opportunities.

To illustrate how Finnovating facilitates connections and collaborations, let’s imagine there’s a Mexican company specializing in B2B biometric identification. Finnovating assists this Mexican company in finding customers in the Latin American market, and if this Mexican company wants to expand its operations into Spain or Europe, Finnovating connects them with the “soft-landing program” offered by the Madrid City Council. Finnovating thus serves as the intermediary, providing them direct access to this program. Additionally, Finnovating also helps companies from Spain or Europe looking for similar services that the Mexican company provides. This creates a two-way exchange of services and opportunities. Within the platform, corporations have the opportunity to showcase the services they offer. For instance, if a company like VISA offers open banking services, and another company is in search of such services, Finnovating acts as the intermediary to connect these two parties. Prominent companies like BBVA utilize the Finnovating platform when they are seeking technological solutions for innovation. In these cases, Finnovating reaches out to the broader ecosystem and employs artificial intelligence to identify the most suitable companies to meet BBVA’s needs. For institutions, Finnovating provides a white-label platform, allowing them to manage their ecosystem. This approach has been highly successful in facilitating connections and collaborations.

M.I.A.: Does this white-label platform work for the Madrid City Council?

R. G.: It will be the next phase of our plan. At present, we utilize the platform to pinpoint companies that are interested in establishing a presence in Madrid. How would we traditionally seek out these companies? We might organize events or conduct a roadshow, both of which we still do. However, the platform offers access to more than 20,000 companies. When any of these companies express interest, we can immediately reach out to them, and they can directly submit their applications or inquiries.

 M.I.A.: Finnovating was selected by CNBC as one of the most relevant fintech companies in the world. What did this recognition mean? Does it help to attract new companies? Does it help in accessing institutions?

R.G.: CNBC asked Statista to create a list of the world’s top 200 fintech companies, divided into nine categories, including digital business solutions. To our surprise, we found ourselves within that category, making us the only Spanish company on the entire list and one of just four in the Spanish-speaking world. This ranking has a global reach. What’s especially significant for us is that we’re acknowledged as one of the 25 companies that offer digital solutions for businesses. Within the digital business solutions category, we stand out as the only company dedicated to connecting other companies. It’s a triple recognition with a global impact. This recognition serves as a valuable indicator of our success, particularly when we expand into countries where we might not yet be well-known.

M.I.A.: What is your opinion of the fintech ecosystem in Madrid and its development?

R.G.: Spain has consistently harbored a significant number of fintech companies. This is largely due to our robust financial sector, which holds a prominent position in both European and international contexts. Many of the professionals within this sector have ventured into the realm of startups, resulting in a natural synergy. At present, Spain boasts over a thousand fintech companies, and Madrid is the hub for 60% of them. Various factors have made Madrid an ideal breeding ground for startups. One common factor, shared with other global capitals, is the presence of regulatory authorities. However, there are other factors at play today. Madrid is currently in the international spotlight, drawing the attention of individuals from both Latin America and Europe.

Moreover, Madrid has been attracting companies that are choosing to relocate their headquarters. We have a case of a Chilean company that has moved its headquarters and entire business operations to Madrid, facilitated by its soft landing service. Madrid is no longer merely a hotspot for local opportunities; it’s also becoming increasingly attractive to international enterprises. This shift is important, as is the city’s highly flexible, open, and business-oriented policy landscape.

 M.I.A.: Can you explain the work involved in this process? In simpler terms, what specific actions were taken to encourage a Chilean company to move its headquarters to Madrid?

 R. G.: There are three key components at play. The first, and most crucial, is the Madrid brand and the city’s overall appeal. Without a compelling value proposition, none of this would be possible. Madrid, in this case, has a strong value proposition as a city. However, it’s the collaboration between the public and private sectors that truly matters. This collaborative effort is a major draw. In this particular instance, Madrid Investment Attraction has proposed the creation of a fintech platform in partnership with a private provider. It’s this synergy between the public and private sectors that has created opportunities for companies interested in relocating, and this is further complemented by what the city itself has to offer.

M.I.A.:  How do you perceive Madrid compared to other capitals, not only in Europe but also in Latin America? Who is Madrid competing against when it comes to attracting fintech companies?

R.G.: Currently, on the European stage, we’re competing with two major cities: Paris and London. London, despite Brexit, continues to draw significant investment and talent. Paris has gone from being the fourth fintech hub in Europe before the pandemic to becoming the second, surpassing even Germany. The national government is committed to investing in and supporting startups. On an international level, we have San Francisco, Singapore, and Israel as strong competitors. In Latin America, Mexico and Brazil stand out, although Colombia, given its size, is gaining particular attention.

M.I.A.: What key aspects do you believe Madrid should emphasize to attract more international fintech companies?

R.G.: The essence of Madrid lies in its people. In fact, I believe that was one of the keys to London’s success until Brexit. Madrid has the capacity to draw a wealth of international talent by offering a unique quality of life. While London was backed by significant investments, an aspect Madrid needs to improve upon, the levels of investment in France and England considerably surpass what’s seen in Spain. Nevertheless, it’s worth noting that we outpace countries like Italy or Portugal. Nonetheless, it’s always essential to measure ourselves against the best.

In Madrid, the pool of international talent is continuously expanding. The capacity for people to feel at home here is what makes it possible to attract this talent, which in turn makes it easier to explore business opportunities, hire employees, establish and grow companies here. Moreover, there’s the proximity to regulatory authorities and supervisors. In fact, the idea of creating a sandbox, a testing ground, was initiated by the Spanish Association of Fintech and Insurtech. We were the second country in Europe to introduce this concept, indicating that we are at the forefront of innovation.

M.I.A.: What do you think is lacking?

 R. G.: We should put more effort into creating a platform for the ecosystem. This is a global trend we’re observing. On an institutional level, the key lies in having a wide physical community but also digitalizing it to connect with the rest of the world. We’re working on this with the City Council. We can see this in countries like Portugal and Colombia, as well as in countries in the Middle East and Asia. In these digital platforms, they have interconnected communities for doing business. It’s the next step. What do you want? To attract international talent and investment and enable companies in your city to work and expand globally. To achieve these goals, it’s crucial to connect ecosystems.

M.I.A.: Soon, the Fintech Unconference in Mexico and the Insurtech Unconference in Madrid, organized by Finnovating in collaboration with Madrid Investment Attraction, will take place. How did this initiative come about, and why is the first one in Mexico?

 R.G.: These gatherings are not new. We began organizing them several years ago because we had an investment vehicle and a desire to invest within the Spanish ecosystem. At that time, our investment approach was centered on identifying the leaders of startups. It wasn’t a typical conference-based model; rather, our exclusive invitations were extended solely to CEOs and founders of startups from Spain and Europe. We limited the number of participants to around 100. Subsequently, we expanded our invitations to include investors, government representatives, and corporate stakeholders. The purpose was to engage in discussions about the future of the sector and facilitate collaboration agreements. This initiative started as an experimental project and eventually grew to encompass ten Unconferences held in five different countries.

When the pandemic emerged, we adapted by creating an online platform. Since then, we have organized events in Madrid, Mexico, and Colombia. We’ve noticed that there’s a particularly strong connection between the Spanish fintech sector and Mexico and Colombia. This is why we are hosting the upcoming event in Mexico. In Madrid, we organize both a fintech and an insurtech conference On November 7 we are holding the insurtech conference in collaboration with Madrid Investment Attraction to attract international companies to the sector.