Berlin was recently ranked seventh in the Start-up Genome’s 2017 Global Start-up Ecosystem Report, an improvement from its ninth place in 2016. The result confirms a widely held view that Germany’s capital city has the ability to “beckon international founders and talent,” thanks to affordable living options, lenient visa regulations and a unique start-up culture.
There is, however, still a lot of work to be done before Berlin moves higher up on the list to challenge cities such as San Francisco or London. Two big IPOs in 2014 (from Zalando and Rocket Internet), which were valued at close to $14 million, had an “out-sized effect,” according to the Startup Genome Report.
This means the city will need to prove itself and “its upward trend” with fresh IPOs, and confirm its place as the second-best European start-up ecosystem. According to the report, the top ten start-up ecosystems are: Silicon Valley, New York City, London, Beijing, Boston, Tel Aviv, Berlin, Shanghai, Los Angeles, and Seattle.
Ten Key Findings:
- There are an estimated 1,800 to 2,400 active tech start-ups in Berlin.
- Areas of significant growth in Berlin are FinTech, digital health, artificial intelligence, mobility, food technology and cyber-security.
- Rocket Internet is a driving force of Berlin’s ecosystem growth (the company raised $1 billion in funds in 2016).
- Berlin attracts the largest percentage of start-ups from outside the country, compared to other European ecosystems.
- Berlin attracts 11% of start-ups from outside the country (the European average is 2%).
- Forty-three per cent of start-up founders in Berlin are immigrants.
- This is the second highest globally, trailing behind Silicon Valley (the global average is 19%).
- The Berlin ecosystem is valued at $31 billion (the global average is $4.1 billion).
- Software engineers in Berlin have an average salary of $55,000 (the global average is $49,000).
- Berlin has a high visa success rate: 77 per cent (the global average is 41 per cent).