StartUp Hub Berlin

Knuckling down to business – An intro to Berlin’s Tech Scene

A Winning Culture – young and vibrant workers

When people interested in Berlin’s startup scene ask about the one thing that makes it so special, there is probably only one answer: its diversity. The diversity of industries, ideas, startups, people, spaces and places. People from all over the world have created a unique ecosystem and winning culture in which startups have an extraordinary, grassroots basis to grow. The city attracts highly qualified talents from all over the world to start their international careers and the fact that English is most established as a business language makes it fairly easy to settle down – whether as an employee or founder.

The Infrastructure

Everyone in Berlin has a very special relationship with their neighborhood, their so called “Kiez”. Very often, people prefer to stay in their Kiez all day long. This might be one of the reasons why hubs for the tech and creative industries can be found in every area of the city. In fact, the demand is so high that over 30 co-working spaces are more or less fully booked out. Global brands such as Mindspace and WeWork recently settled here, with more surely to come.

The Cost Factor

One of the many challenges startups are facing is the costs involved. Berlin is said to be “poor but sexy” and while this is probably a little outdated as the only feature of the startup capital, the fairly cheap costs of living and building a business (compared to e.g. San Francisco & London) are still one of the big advantages – also salary costs are about one third of those a startup would have in San Francisco and a half compared to London.

The Helpful Ecosystem

There are also plenty of corporations rushing to swoop into the growing startup scene. Take Cisco with the Innovation Campus in Berlin Schöneberg, or VISA and VW, which just opened their “Digital Labs” in Berlin. Also, Lufthansa became a corporate partner at Factory Berlin, a creative campus launched in 2014. Other examples are the several accelerator programs such as METRO & Techstars, as well as Telekom’s hub:raum or Microsoft’s Venture Accelerator. A recent study already counts more than 120 Innovation Labs, Coworking facilities, Incubators or Accelerators in Berlin. Every year 500 startups are founded in Berlin to develop their innovation.

Access to capital

While Berlin is still said to be lacking in capital, Berlin’s startups raised about $2.2 billion in venture capital in 2015 compared to $1.5bn in London, and the investor flow is set to continue. A total of 371 companies in Germany received venture capital last year, which is 85% more than in 2014. Over 3 billion Euros were spent on startups in total, of which more than 2/3 went to the Berlin Tech scene.
There have even been a few unicorn stories involved (Mister Spex, which received $40m in funding this year in a round led by Goldman Sachs; Microsoft buying the personal planning software firm 6Wunderkinder in June; or the $18m investment in the photosharing-app EyeEm lead by Peter Thiel’s Valar Ventures) but there is still a long way to go compared to other global ecosystems. But people in Berlin’s startup scene are getting more serious, they are growing up and want to build more genuine ideas or take more commercial approaches. Instead of just creating startups based on more random ideas, a more businesslike calculation is now involved in the process. This solemn approach is accompanied by equally serious fundings from investors looking to capitalize on the city’s entrepreneurship.

A sense of belonging to a community

Berlin ist about to develop its very own DNA – in which the community itself plays the biggest part. And the fact that competitors are never seen as enemies, but rather as fruitful sparring partners is a mature attitude for a startup scene that is knuckling down for business, hype or no hype.

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