Here is a quick and definitive guide for those moving to Munich to help them understand the startup ecosystem better before shifting bases. Germany has the largest economy in Europe and is the fourth largest one in the world.? The share of startups in the German market is increasing by the day with cities like Munich developing into promising startup hubs. Entrepreneurs, startups, and startup job seekers from different parts of the world are moving to Munich, a city that is brimming with innovation.
Known for hosting popular beer festivals and jaw-dropping European architecture, the city is a thriving tourist hub in Germany. Munich is the capital of the state of Bavaria and has a population of 5.2 million people. It has a GDP of $133 billion, and the primary industries in the city are automotive engineering, aerospace, and ICT. Moving to Munich is a good decision for B2B startups whose products and services are based in the sectors as mentioned above.
The city was featured as one of the top startup ecosystems in the Global Startup Ecosystem Report 2018 by Startup Genome. It is one of the newest members to be highlighted in this prestigious report.
What Makes Munich a Hot and Happening Startup Hub?
Munich has more than 1000 startups, a number that is continually growing. According to the Global Startup Ecosystem Report 2018, the early stage funding per startup is $416K which is quite a number considering that the global average is $252K. The valuation of the ecosystem is $4.4 billion according to the same report and has an impressive amount of women founders as compared to other major ecosystems.
Startups in Munich have Access to Rich Sources of Funding
The city may be slightly behind top global startup ecosystems but has ample sources for the current startup scenario. The funding scene is definitely improving owing to the increasing number of angel investors and venture capital firms. With close to 3,500 angel investors, entrepreneurs in Munich do not have any shortage of funding for their startups. Munich also has a plethora of venture capital firms which are quite active. There are close to 50 of them including a trailblazing private equity firm with a fund of $3 billion.
Move to Munich for its Mentors
The city?s network of mentors is a valuable resource for startups in Munich. Top leaders from successful startups and other large organizations in Munich are open to offering mentorship for startups and entrepreneurs as an act of giving back to the entrepreneurial community of the city. A lot of times investors double up as mentors as well, investing not just money but also their time. These mentorships include help in a variety of aspects from strategic vision to hiring procedures to product development.
Startups in Munich Get the Best of Talent Locally
Businesses and entrepreneurs moving to Munich do not have to worry about human resource capital as the city is one of the most valuable talent pools in Europe.? Universities like the Ludwig Maximilian University of Munich and the Technical University of Munich are a wellspring of talent. Startups in Munich can find the best of team members from the hundreds of students graduating from these and the other top-notch universities in the city. A lot of students with entrepreneurial aspirations move to Munich to study in these institutions hoping to get absorbed in the startup community when they graduate.
Move to Munich to be a Part of a Robust Startup Community
Much like its counterparts, Munich also has an active and supportive startup community. This community includes not just startups but also budding entrepreneurs, investors, and many ecosystem partners that are helping shape the ecosystem.
Startups in Munich witness a number of events and activities that help the various players in the ecosystem come together to learn and network. Bits & Pretzels, an annual startup festival, brings together more than 5000 startups from Germany and across the world.
The city of Munich also has put forward many initiatives to help entrepreneurs set up their business. The Munich Business Startup Office is one of them. The office has been set up to offer valuable business advice for budding entrepreneurs and is run jointly with Chamber of Commerce and Industry for Munich and Upper Bavaria. The services are provided free of any cost.
An important source of support for the vibrant startup community in Munich is from the co-working office brands.?? These co-working offices offer a number of amenities and conduct quite a few events all around the year to keep the community well connected. Some of the top co-working office brands in Munich include Combinat 56, Design Offices Arnulfpark, WeWork, Idea Kitchen, and MakerSpace.
Startups moving to Munich also have an exciting choice of accelerators and incubators whose programs can be helpful for setting them on the path to growth.
The Munich Tech Sector, a Flourishing Segment for Startups
The tech sector in Munich boasts of headquarters and labs of global tech giants like Microsoft, IBM Watson IoT, Intel, and Huawei. The industry has grown with the support of the many educational and research institutions in the city and the presence of a strong funding community. Let’s look at some of the sub-sector strengths of the startup economy in Munich.
Fintech Startups In Munich
Growth in insurtech startups in Munich has helped give the fintech sub-sector the push it needed to become one of the prominent segments. A lot of entrepreneurs and startup job seekers move to Munich each year for making the most of this buzzing sector. ?Allianz and Munich Re, two insurance giants from Munich, have been acting as a catalyst in this sector by providing support programs in partnership with organizations like Werk1. Fintech startups like Scalable Capital brought the fintech sub-sector in the limelight with its funding activities. The company raised assets that are worth 500 million pounds in just four years of establishing itself and last year the world’s biggest asset manager, BlackRock, got shares in the company in exchange of $30 million.
Healthcare Startups In Munich
Munich is home to medical technology institutions that are top notch and globally recognized. The Ludwig Maximilian University of Munich is one of the top five universities globally in the medical technology discipline and an important player in the city’s healthcare sector. The sector brings in a revenue of $5 billion and consists of 350 companies. Notable success stories of startups in the region are of Sapiens and Definiens. Sapiens offered solutions for deep brain stimulation therapy and was sold for $200 million in 2014. Definiens also sold in the same year for $150 million is a digital pathology solutions provider.
Mobility Startups In Munich
In a country that is synonymous with automotive brilliance, it does not come as a surprise that mobility is one of the top sub-sectors in the Munich ecosystem. The segment made it to the top 3 sub-sectors with the highest funding with 10% of the total regional venture capital investment coming into the mobility segments between the years 2012 and 2017.? Home to headquarters of automotive giants like BMW, ADAC, Audi and Man,? entrepreneurs and startups with automotive related business ideas should undoubtedly move to Munich to be a part of a high growth industry with a good infrastructure. An essential element of the infrastructure is the education sector comprising some of the finest tech and engineering institutions. These world-class colleges and universities are crucial for the flow of talent and knowledge in this sub-sector. A startup success story from the segment that should not be missed is of Flixbus which went to become the largest long-distance mobility provider in Europe and that too within five years of being established.
The city is not just great for a productive professional life but also on the personal front with its array of outdoor activities and architectural landmarks. The startup ecosystem in Munich has all the right frameworks economically, socially and culturally for businesses to grow from scratch. Move to Munich and explore the perks the startup community and the government has in store for entrepreneurs.