Why Berlin’s Silicon Allee is Europe’s new Silicon Valley [infographic]
As the UK prepares to “brexit,” Berlin’s Silicon Allee is poised to take its place as the EU’s new Silicon Valley. Various entrepreneurs think Berlin will take London’s place as the EU’s capital for business after the departure. In fact, Inc. reports results from a recent Inc. 5000 survey that indicate 26 percent of EU entrepreneurs believe Berlin will emerge as the EU’s new business center. Others surveyed think Frankfurt will take the crown—but only two respondents said London will remain on top.
As Arne Schepker, CMO of online language learning system Babbel explains: “Berlin is here to stay. In Europe, only London can compete right now and the impending Brexit is not going to make the UK any more attractive. I personally think Berlin needs more breakthrough showcases like Zalando to build confidence globally and raise valuations.”
There are several favorable conditions that give Berlin an edge in this race. The city boasts a low cost of living compared to tech competitors like London, San Francisco and New York City. There is also a steady stream of skilled labor in Berlin, not to mention easy access to the rest of the EU.
Furthermore, there is already an American tech presence in Berlin. Several big companies like Airbnb and Facebook already have offices there, and incubator programs are readily fostering German startups such as EyeEm and N26 in Berlin. In fact, according to Ernst & Young, Berlin is now home to around 2,500 active startups, which have attracted about $2.7 billion* in venture capital in total. This means Berlin is attracting more money than startups anywhere else in the EU—but not nearly as much as Silicon Valley.
So, what’s the downside? Entrepreneurs still face barriers to entry in Berlin that don’t exist in Silicon Valley or London. Although it is growing fast, Berlin’s talent pool is significantly smaller than London’s. (This may be changing even more rapidly as Brexit causes a talent drain in the UK.) This problem is heightened by the lack of an alumni network that is dependent on a minimum volume in exits. To get to a better place in this regard, entrepreneurs in Berlin will need to either sell their startups or take them public, triggering more local investment.
All things considered, though, Berlin’s Silicon Allee is EU’s new Silicon Valley. This is especially true since the cost of living is pricing out many tech companies as it prices out their workers. We crunched the data to show you how and why that’s going to happen—and why more and more startups, originating in both the EU and the US, are going to be sprouting in Berlin.
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The debut of ‘Startup Europe China Network’ at Startup Ole
The third edition of Startup Olé on 26-27 April of this year was a major success. More than 400 startups, 200 international speakers, as well as a variety of corporates, investors, accelerators, universities and media from across Europe came together for two days in Salamanca to exchange ideas and brainstorm on entrepreneurship. Startup Olé was created in 2015 to provide a unique networking and pitching opportunity for the key players and their projects in the European tech startup ecosystem.
Oneof the main new initiatives presented this year was‘Startup Europe China Network’, which will link the European startup community with one of the EU key strategic partners: China. The initiative was discussed by enthusiast participants to Startup Olé during a dedicated workshop organised by the Brussels-based digital business association ChinaEU on 26th April.
More than 20 startups, investors, corporates, incubators and accelerators from all over Europe intervened in the workshop, which was moderated by Isidro Laso, Head of Startup Europe at DG Connect of the European Commission.
In the lively discussion, consensus wasreached that building partnerships with China is a highly-needed exercise, since China can offer a great deal of opportunities for European startups to scale-up their businesses. This is not only on the ground of a highly dynamic market with many active investors, corporates, angel ventures, but also given the fact that China is becoming a world leader in innovation that can offer European companies inspiring models to learn from and upgrade themselves. However, such partnership requires special considerations, in order to avoid one-way acquisitions of startups by Chinese partners.
The importance of establishing a balanced two-way relationship was also the message of ChinaEU Director Claudia Vernotti in the preceding panel discussion ‘Partnering with Europe: Beyond the EU’, which provided an exchange of experiences among different international partnerships activated between Europe and the Silicon Valley, India, Africa, Lebanon and Eastern Europe. ‘Startup Europe China Network’ will make use of the good practices developed under these partnerships.
“Thanks to the precious support of over a dozen European players who wish to drive together this new China adventure, I have no doubts that ‘Startup Europe China Network’ can make an impactful contribution in supporting European startups to scale up everywhere in the world” said Claudia.
‘Startup Europe China Network’ will be an open platform to create long-lasting connections between European and Chinese entrepreneurs, corporates and investors, with the aim of creating a channel for innovation exchange, investment and high-tech cooperation between Europe and China.
‘Startup Europe China Network’ is now seeking to consolidate its community by getting further stakeholders to join the enthusiast initiators. To enquire about the network, please do not hesitate to contact firstname.lastname@example.org.
Do not miss out on the opportunity to connect with the ever-growing dynamic Chinese innovation ecosystem!