9
BERLIN
When the Berlin Wall came down, it marked the end of Soviet domination in Germany and the invasion of partying hipsters in Berlin, Angela Merkel being one of them. And despite critics describing the Berlin startup scene as all hype with no real jobs, as well as the usual problems of scale, it has prospered. With talented young people from all over the world in a vibrant and affordable city that is incredibly welcoming to newcomers, Berlin has overcome the controversies that were once associated with Germany (namely Kim Dotcom, the founder of file sharing website Megaupload, and Fabian Thylmann, once owner of an online porn empire and responsible for billions of acts of self-pleasure) and created a tight-knit startup community with a big creative influence. General Assembly even has a class titled, “Introduction to the Berlin Startup Scene.” Speaking German is not necessary, but having a SoundCloud profile with “wet” electronic music is a must.
AGGREGATE BERLIN VENTURE ACTIVITY Q4’15 - Q3’16
VC FUNDING: $1.0B
DEALS: 225
EXITS: 41
5 YEAR YoY FUNDING GROWTH: 32.1%
5 YEAR YoY DEAL GROWTH: 22.4%
Source: CB Insights
BERLIN AT A GLANCE
Power Breakfast
St. Oberhalz
The Digital Eatery
Coffee Shops to Start Up In
Godshot
Grosz
Oslo Kaffebar
Best Bar
Bar 1000
Local Drinks
Bionade
Club Mate (with vodka)
Voelkl Zisch
Offline Tinders
Berghain & Panorama Bar
Sisyphos
Startup District
Kreuzberg
Mitte
“Must Be At” Local Events
Berlin Music Festival
Christmas Markets
Oktoberfest
THE TOP
ANGELS
Aleksandr Dresen
Christoph Marie
Fred Destin
Klaus Hommels
Phillip Moehring
VCs
EarlyBird VC
German Startups Grp.
Lakestar
Paua Ventures
Rocket Internet
ACCELERATORS
Axel Springer Plug&Play
Berlin Startup Academy
Hardware.co
hub:raum
Microsoft Ventures Berlin
Startupbootcamp
Youisnow
ENTREPRENEURSHIP EVENTS
Berlin Talent Summit
Build IT Berlin
Charité Entrepreneurship Summit
Startup Camp Berlin
Startup Europe Summit
Q4’15 - Q3’16 TOP FUNDING ROUNDS
AUTO1 Group—$117.6M
SoundCloud—$70M
Azubu—$59M
GetYourGuide—$50M
Spotcap—$50M
Younicos—$50M
Beginning in Berlin in 2007, Rocket Internet bills itself as a startup accelerator and company builder, but more often resembles a copycat company. They traditionally find successful websites in the United States, clone them toward an international market, and sell them back to the original. The Samwer brothers and their model have been wildly successful in terms of raising money, but Rocket Internet has given Berlin a copycat reputation.
THE FOUNDERS
Alexander, the youngest, has an MBA from Harvard and acts as a venture capitalist. Oliver, the middle brother, serves as the CEO of Rocket Internet, with a business degree from WHU, a well-known German business school. Marc, the eldest, has a law degree from the University of Cologne, is uninvolved with the day-to-day activities of the company, and has previously worked extensively with Groupon.
Amid criticism of being idea thieves and innovation killers, the Samwer brothers have argued that while some are better at generating ideas, they are better at executing them. In a rare interview in Berlin, Oliver called good inventors “Einsteins,” but compared him and his brothers to Bob the Builder, executors of inventions. Because who would rather be a highly popular cartoon character than a man with the highest IQ?
Rocket Internet had an $8.2 billion IPO. Since then, however, the stock price of the company has declined, leading to questions about its future.
Investment: ZALANDO
Founded by the Samwer brothers as an eBay copycat, and acquired by eBay for $43M in 1999.
Investment: CITYDEAL
In 2010, the Samwer brothers scaled and invested in CityDeal, a knockoff of Groupon that became the top deal site in thirteen countries within five months. Groupon acquired CityDeal, appointing Marc as an executive of international operations. Marc later stepped down from the role amid controversy about a toxic work culture.
Investment: CRAZY FROG
The annoying frog ringtone was marketed by Samwer company Jamba, which was acquired by Verisign for $273M.
Berlin-based company SoundCloud offers free streaming of a wide variety of musicians. Electronic remixes are most popular on the site.
5 Must Follows On SoundCloud
1. ODESZA 395K Followers
Electronic music duo that rose to fame with debut album Summer’s Gone.
2. ABSENCE 49K Followers
Underground DJ with some remixes of artists ranging from Lana del Rey to Wiz Khalifa.
3. FLYING LOTUS 5.5M Followers
DJ and rapper based out of Los Angeles has very experimental taste.
4. SOUND PELLEGRINO 23K Followers
Paris-based label focusing on club music.
5. #UNKNOWN 24K Followers
London-based account releasing house music with no artist information to dissuade the public from making superficial assumptions by the artist. Mysterious.
THE STARTUP LINE OF BERLIN
The U8 Line not only allows people to travel throughout Berlin, but also stops at many entrepreneurial hotspots. Originally published on setting.io.
Voltastraße
Seed VC firm WestTech Ventures built up its incubator Project Flying Elephant in the former supermarket chain Kaisers (previously used by coworking space Supermarkt).
Bernauerstraße
Factory: referred to the new startup campus, where some of Berlin’s most prominent startups like SoundCloud, GoButler, and several others call the former brewery their home base.
Rosenthalerplatz
St. Oberholz: the preferred hotspot for Mac users and digital nomads, where WiFi is free, and eavesdropping on startup conversations is included. Mein Haus am See and Neue Odessa Bar on Torstraße are the places where you find Mitte startup employees sipping their cocktails.
Weinmeisterstraße
Hackescher Markt has become somewhat a magnet for ad-tech companies—one of the pioneers being Hitfox, whose office is located on Rosa-Luxemburg Straße. Across the station, startup supportive corporate SAP has its Berlin office.
Alexanderplatz
A few startups have settled around here, including Wunderlist, MeinFernbus, and Wooga. A bit farther south, located on Museumsinsel, is the newly opened German Tech Entrepreneurship Center (GTEC), which has become home to the Berlin Startup Academy and US accelerator Techstars.
Jannowitzbrücke
Immobilienscout24 and its accelerator program YOU IS NOW are just a few blocks away from Jannowitzbrücke.
Moritzplatz
Betahaus is Berlin’s most known coworking space and popular starting point for newbies to the city’s startup scene.
Kottbusser Tor
GSG-Hof on Adalbertstraße is where startup Locafax rented its office. The offices of eDarling, EyeEm and Blinkist are also just a stone’s throw away.
Schönleinstraße
Several startups have found their base along Paul-Lincke Ufer, including SumUp, Mymuesli, and Amorelie. Close by, Umspannwerk hosts companies like shopkick and fitengo. Kreuzberg’s Graefekiez is also known as the “Bitcoinkiez,” where you can use the virtual currency to pay for your coffee, make photocopies, or pick up a vinyl record.