Is it true that anyone who wants to set up a start-up in Germany has to go to Berlin? On the contrary. Although the Berlin startup scene is still the undisputed number one in most rankings, other cities and regions are catching up. In addition to the metropolitan areas of Berlin, Munich, Hamburg, Frankfurt and the Rhine-Ruhr region with DMEXCO, one should also keep an eye on the outskirts as well. Here is a look at some of the hot locations:
Measured by the volume of venture capital deals, Berlin currently ranks 12th worldwide. According to the print magazine The Hundert, Berlin is also home to 49 of the 100 most innovative German start-ups. Among others Zalando, Delivery Hero, Betterplace, Soundcloud and Immobilienscout24 are located here, as well as the incubator Rocket Internet. Co-working spaces and startup events are plentiful. Munich is another start-up hotspot in Germany.
Munich is home to a particularly large number of business angels and venture capitalists. The city has therefore made it into the top 50 in the VC investments category as the second German metropolis after Berlin. It ranks 42nd, putting it ahead of Dublin and Vancouver. The Munich start-up conference Bits & Pretzels now enjoys an international reputation, even though Kevin Spacey’s appearance in 2017 may have been a bit more Hollywood glamor than necessary. Flixbus, Mytheresa, Westwing, Magazino, Shore GmbH and Scout24 AG have their headquarters in Munich. 5.8 percent of all German start-ups are located here and 12.3 percent in Bavaria as a whole.
The Rhine-Ruhr region, home of DMEXCO, is also becoming increasingly important for start-ups. According to the German Startup Monitor, there are more start-ups in NRW than in Berlin, namely 19 percent of all 1550 start-ups currently listed there, of which 11.2 percent are located in Cologne alone. By way of comparison, Berlin has a share of around 16 percent. Media companies are big contributors to the lively start-up scene in Cologne. Well-known Cologne start-ups include the wall decorators Picanova, the software company Silexica and the online translator DeepL. Trusted Shops, a company in which Rocket Internet now has a stake, was also founded as a start-up in Cologne. Dortmund and the surrounding area also boasts a lively start-up scene. Urlaubsguru, MySugarDaddy, readbox and clickworker are at home here. Fleetbird, a white label platform for mobile sharing services is now also in Dortmund. Co-founder Philip Müller was motivated to move from Berlin to the area due to the better personnel situation. The former steel metropolis of Essen also has start-up potential. This is partly because Essen’s economic development department is working hard to promote start-ups. Then of course there’s Düsseldorf. In the state capital you will find, among others, the hotel price comparison engine Trivago and Salz&Brot, providers of commission-free apartments.
Even if Hamburg might not be able to keep up with Berlin (any longer), the Hanseatic city remains a permanent fixture in the scene and is a digital class in its own right as a German location for Facebook and Google. 7.2 percent of all German start-ups are based in Hamburg. These include companies such as Xing, About You, Finanzcheck.de, Deposit Solution, the Fintech company Figo, the event specialist Sofaconcerts and Facelift, the cloud for social media marketing.
The Stuttgart-Karlsruhe region has more to offer than just traditional industry. The statewide network of start-ups, corporates and institutions works well. 12.6 percent of all German start-ups are located in Baden-Württemberg, 6.1 percent of which are located in the Stuttgart-Karlsruhe region. Well-known Stuttgart start-ups include Mädchenflohmarkt, AnyDesk and dimago. In Bruchsal near Karlsruhe, Volocopter has developed an electrically powered multicopter for people, which is currently making the tech conference rounds. The Perfekt Futur start-up center on the grounds of the “Alter Schlachthof” was established in Karlsruhe in 2013. Young companies from the culture and creative industries have settled there.
Frankfurt am Main becomes interesting for start-ups at the latest when they want to go public. With the exception of fintech companies, however, the regional start-up scene is still manageable. Deutsche Börse is active there. The TechQuartier Frankfurt provides ample opportunity for co-working. 4.1 percent of all German start-ups are located in Hessen.
Dresden and Leipzig
In the east of the republic, the focus is primarily on the Saxon metropolises of Dresden and Leipzig. 4.6 percent of all German start-ups are based in Saxony. Spreadshirt and Food.de are at home in Leipzig. The Accelerator SpinLab (also known in other cities) provides for fresh impetus here. In Dresden you will find the software company Stadt.Land.Netz, the minibus rental CarlaundCarla.de and of course Volkswagen’s Gläserne Manufaktur, which supports start-ups from all over Germany.
There are many other functioning start-up hotspots in Germany. Examples of this include Osnabrück with the Innovate OS conference and the Seedhouse start-up center, Augsburg with the Rocketeer Festival, and Bielefeld with its Founders Foundation, established by Bertelsmann.
The bottom line
The German start-up scene mirrors the federalist system. There is more than one center. Berlin is important, but not dominant. The diversity of German start-up locations has some advantages, as it ensures short distances to traditional industry players and offers young companies alternatives to ruinous high-price locations. However, the decentralized structure does not make it easy to maintain an overview. A visit to DMEXCO could be helpful in this regard. The Future Park there will not only feature numerous international tech companies, but also companies from all over Germany.