Spain's technology sector is active, fragmented and attractive to international buyers. If you own a Spanish IT, SaaS or digital services company and are considering an exit, this article explains what buyers look for, how valuations work, and why patient capital may suit you better than conventional private equity.
If you own a technology company, software business or digital services firm in Spain, you have almost certainly already received approaches — from private equity funds, from international strategic buyers, or from M&A intermediaries. The Spanish technology transaction market has been active for years, and activity has only intensified. But having options is not the same as having clarity about which option is right for you, your company and your team.
This article is not a sales pitch. It is an honest analysis of what happens when a Spanish technology company goes to market: what buyers evaluate, where complications arise, and what alternatives exist to the conventional M&A process.
Spain has approximately 30,000 active technology companies, with significant concentrations in Madrid, Barcelona, Valencia and Málaga. The sector has matured considerably over the past decade — fewer short-cycle startups, more established companies with real revenue, stable client bases and consolidated teams.
Three types of buyers operate in this market. First, private equity funds seeking platform acquisitions or bolt-ons to integrate into existing portfolios. Second, international strategic buyers — European or North American companies seeking entry into the Spanish market or looking to acquire talent and technology. Third, a growing number of family offices and industrial operators that prefer predictable business models to the inflated valuations associated with venture capital.
The result is a market with strong buyer interest but a significant asymmetry: buyers know exactly what they are looking for and how to structure deals. Sellers, by contrast, are typically navigating a sale process for the first — and only — time in their lives.
Valuing a Spanish technology company does not follow a single formula. The multiple applied depends fundamentally on the revenue profile.
SaaS and product software with recurring revenue. This is the most highly valued segment. If your company has a subscription software platform — B2B or B2C — with low churn and sustained growth, multiples can sit between 8 and 15 times EBITDA, or be calculated on ARR if the growth profile is sufficiently compelling. Buyers pay that premium because they are purchasing visibility of future revenue.
IT services, technology consultancy and outsourcing. The typical range is 5 to 8 times EBITDA. Buyers value the client base, active contracts, the technical capability of the team and revenue diversification. A services company where three clients account for 80% of revenue will be valued significantly below one with twenty well-distributed clients.
Digital agencies and bespoke development. The range is 4 to 6 times EBITDA. Valuation here is more sensitive to founder dependency and the nature of projects — recurring mandates are worth considerably more than one-off projects.
Beyond the headline multiple, buyers apply qualitative adjustments: depth of the management team, quality of the client portfolio, maturity of the code and architecture, and — critically in technology — the degree to which the business can operate without its founder.
This is the issue that most impacts the valuation of small and mid-sized Spanish technology companies, and the one that is least discussed in commercial presentations.
In many IT companies with revenues between €3 million and €20 million, the founder simultaneously plays the role of the main commercial asset — the person who closes large contracts and maintains relationships with key clients — and the main operational risk. If the founder leaves, what remains?
A sophisticated buyer will analyse this in detail. They will review client contracts to assess whether they are genuinely signed with the company or informally conditioned on the founder’s presence. They will evaluate whether the technical team can execute projects without the founder’s direct oversight. They will assess whether the sales process is documented or depends entirely on one person’s tacit knowledge.
The greater the founder dependency, the larger the earn-out component in the transaction — the proportion of the purchase price the seller only receives if performance targets are met during one, two or three years after the sale. Reducing that dependency before launching a sale process is probably the highest-return investment a technology founder can make.
In recent years, we have seen how several technology sale processes in Spain became complicated — or collapsed — due to IP problems.
The most common issues are: employment contracts that do not correctly assign IP generated by employees to the company; open-source code embedded in the product under licences that impose restrictive conditions on commercial use; developments created for clients with clauses granting those clients ownership rights over the resulting code; and a lack of documentation to establish who created what and when.
Before initiating a sale process, we strongly recommend an internal IP audit. It is not a complicated or expensive process if the company is well organised, but discovering these issues for the first time in a buyer’s data room can be very damaging — both to the timeline and to the price.
A technology company where 60% of revenue is concentrated in a single client is not, in a buyer’s eyes, a company with an excellent anchor client. It is a company with a significant concentration risk. The question a buyer asks is: what happens if that client decides to switch provider, insource the service, or is itself acquired?
It is not always possible — or desirable — to diversify the client base before a sale, particularly when that large client represents a strategically valuable relationship. But it is important to anticipate this point in negotiations and have solid arguments about the depth and resilience of that relationship.
Traditional private equity funds have a defined investment horizon: typically four to seven years, after which they need to exit. This creates structural pressure on the acquired company to grow fast — sometimes faster than is prudent.
At Blue Mountain, our model is different. We are patient capital: we do not have a fund with a maturity date that obliges us to rotate assets. When we acquire a technology company, we do so with the intention of developing it for the long term — investing in product, in talent, in internationalisation — without the pressure of preparing a new sale in four years.
This has practical implications for the selling founder. You can choose a post-sale level of involvement that makes sense for you, without the pressure of hitting earn-out milestones designed to maximise a fund’s return over a short horizon. And you can have confidence that decisions about the company will be taken with a long-term perspective, not with one eye on the next exit event.
If you decide to launch a sale process, due diligence for a technology company has specific components worth preparing for.
Technical due diligence. The buyer will review software architecture, code quality, documentation, test coverage, accumulated technical debt and infrastructure scalability. This is not an examination of perfection — every company has technical debt — but a risk assessment and an estimate of the cost of addressing existing issues.
Commercial due diligence. Client contracts, renewal terms, churn history, pricing, commercial pipeline and sales process. Buyers want to understand not just where the company is today, but why it will still be there tomorrow.
Talent due diligence. The technical team is in many cases the most valuable asset. The buyer will want to understand who the key people are, what their contracts say, what motivates them to stay, and what the retention risk looks like post-transaction.
Legal and IP due diligence. Everything related to contracts, litigation, intellectual property, regulatory compliance (GDPR in particular) and corporate structure.
The ideal process does not begin when you decide you want to sell. It begins two or three years earlier, when you start preparing the company to be sold in the best possible conditions.
That preparation includes: documenting processes to reduce founder dependency, diversifying the client base if concentration is high, resolving any IP issues, strengthening the management team, and organising financial information so that due diligence is clean and fast.
A well-prepared company not only achieves a higher price. It sells faster, with less friction and with less risk of the process breaking down mid-way.
If you own a technology company in Spain and are considering a sale in the coming years, we invite you to an initial conversation with no obligation. At Blue Mountain we take the time needed to understand each company before making any proposal. And through our Certus platform, we can provide an indicative valuation and an analysis of your positioning in the current market.
The first step is always the conversation. Get in touch.
Dirk Manuel Martens Jiménez Founder, Blue Mountain Capital
By Blue Mountain Capital
By Blue Mountain Capital
By Blue Mountain Capital
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