There’s much more to Iberia than the sunny weather.

Spain and Portugal are gaining traction in investors’ minds as increasingly credible places to finance biotech companies, thanks to strong science, a maturing capital network and lower costs.

Spain is the more mature country with a stronger track record of venture-backed companies, technical transfer and entrepreneurial know-how, said Pablo Gabriel Cironi Lopez, director of Life Science Investment at Caixa Capital Risc. But Portugal is catching up, with life science start-ups more than doubling in the last six years, said Hannah Franklin, an associate at Biovance Capital, the country’s only dedicated biotech venture capital (VC) fund, founded in 2024.

In terms of bottlenecks, both agreed science, which thrives in both countries, is not to blame. Rather, the region has a lack of serial entrepreneurship, weak frameworks for spinning out companies and a gapbetween academic grants and the first institutional round.

Iberia’s opportunities

Spain, especially Catalonia and its hub, Barcelona, is now established in terms of investment networks and syndicates, Cironi Lopez said. For more than a decade, companies that have initiated in Spain have received significant funding from international VCs, including both corporate and traditional VCs.

The country will soon be in the position of having more available capital deployment than available projects, Cironi Lopez said. He noted recent investment announcements by the European Investment Fund and Valencia-based Columbus Venture Partners.

Strong local government supports basic and translational research in the regions, resulting in high-caliber science and scientists that attract capital.

Portugal also has high-caliber science, Franklin said, citing examples such as CellmAbs Biopharmaceuticals, a biotech company spun out of NOVA University Lisbon, that signed a licensing agreement with German pharma company BioNTech in 2024. At that time, the company anticipated the deal to be the first in the life sciences sector in Portugal to surpass the one billion euro mark.

The country is also attractive due to its lower costs in lab space and hiring world-class talent, Franklin said. Many locals have gone abroad for their higher education and have returned to their native country armed with experience and business acumen.

In addition, a number ofearly-stage companies are reaching meaningful milestones on non-dilutive public funding before private checks even come in, Franklin added. This in turn translates to lower entry valuations, greater capital efficiency and more runway per euro or pound invested. For an investor thinking about returns, that’s significant, she said.

Portugal scored a major coup this year as the host of BIO-Europe Spring in Lisbon. The push to promote the country to host the life science conference combined multiprong efforts, said Ricardo Viais, chief operations officer at the Portuguese, non-profit association AccelBio, on the sidelines of the recent Swiss Biotech Days event in Basel.

They included Biovance, Biocant Park, a biotech science and technology Park, and BIO-Europe’s organizer. There is additional government lobbying behind the scenes by associations such as P-BIO to support the country’s biotech ecosystem.

Existing roadblocks

Excellent research can become major exits when the right people and capital are in place, Franklin said. The missing ingredient is often the ability to convert that science into companies.

The region still lacks serial entrepreneurship and investor-ready founders who can clearly articulate opportunities at scale, Cironi Lopez said. The ecosystem needs time to recycle experienced founders and operators, such as in other European countries like the U.K, back into the landscape.

Spain is further ahead in its biotech spin-out and investment journey, whereas Portugal lacks the infrastructure and capital depth to turn science into more companies at scale. “We’re still building the playbook for spinning out companies and there is a limited track record to follow,” Franklin said.

In terms of infrastructure, there is varied commercial maturity in technology transfer offices (TTOs). Cironi Lopez said this is a characteristic in Spain as well, as the TTOs are not as sophisticated as in other European countries, but they have improved over time.

The Iberian Peninsula also faces a major bottleneckin the gapbetween academic grants and the first institutional round, Franklin said. Although Portugal benefits from solid public funding via the strategic national Recovery and Resilience Plan and European Union’s Horizon Europe funding program for research and innovation, there is a window before the pre one-million euro or pound threshold. That’s where great science and teams are stalling.

“So we really do need to see more incubators and accelerators that can help bridge that gap and provide not just the capital, but the training and support to turn really good academic research into independent investable biotech companies,” Franklin said.

In addition, Portuguese institutes haven’t been on the radar of investors who can validate the science, provide guidance and support, help build strong teams with track records, open doors to global networks and co-invest as strategic partners. That’s the space Biovance is looking to fill, Franklin said.

International co-investors are especially important for larger Series A rounds and beyond, Franklin added. That said, Barcelona, Lisbon and other Iberian hubs are increasingly interconnected with the wider European VC network, she and Cironi Lopez agreed. Spain has built enough networks and syndicates over 15 years to participate meaningfully in Europe and in the U.S. capital playing field, he said.

Ultimately, both investors made the point that the peninsula is becoming a more mature biotech and life sciences investment region.