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.
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 Berlin is said to be “poor but sexy” and while this is probably a little outdated as the only feature of the startup capital, the fairly cheap costs of living and building a business (compared to e.g. San Francisco & London) are still one of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
Within the first half year of 2017, Berlin’s startups raised about €1.5 billion, and thus 68 percent of the investment into German startups. More than 37 percent of the money raised in 2016 came from foreign investors. A total of 455 companies in Germany received venture capital last year compared to 371 in 2015.
There have even been a few unicorn stories involved (Mister Spex, which received $40m in funding in a round led by Goldman Sachs; Microsoft buying 6Wunderkinder; or the €360m investment in the Auto1 Group, noted to be worth €2.5bn) but there is still a long way to go compared to other global ecosystems. 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 business-like 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 is developing 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.