Berlin: The new capital of tech?

They call it ‘Silicon Allee’ (Silicon Avenue), and whether it’s big tech multinationals or an entrepreneur with an idea to change the world, Berlin is keen to show the tech world that it’s open for business.

Germany’s Free Democratic Party made headlines when it launched a campaign to attract startups from London to Berlin just after Brexit. A white van toured the streets of London emblazoned with the slogan: “Dear startups, Keep calm and move to Berlin.”

It’s debatable whether Berlin really needs to poach from London (although according to Cornelia Yzer, Berlin’s senator for the economy, technology and development, over 100 startups showed an interest in the invitation). Ernst and Young estimates that €2.4 billion were collected by startups in Berlin in 2015 – that’s bigger than London or Paris. In fact, when it comes to venture capital, Die Welt newspaper revealed that London has been trailing Berlin since 2014.

“The brightest minds from around the globe”

In many ways, Berlin’s tech success feels like a foregone conclusion. All the key elements are there – government support, affordable office space and, possibly even more important, accessible housing coupled with a thriving cultural scene, a combination which is particularly appealing to international talent. Add to that a bustling meet up scene – try Betabreakfast every Thursday, or Startup Camp Berlin, every March – and plenty of opportunities for shared workspaces and you’ve got the perfect conditions for startup success.

Berlin tech startups

At the heart of Berlin’s tech scene is Factory Berlin, which describes itself as a “curated community” of “the brightest minds from all over the globe.” Housed in a former brewery that then found itself part of the Berlin Wall, Factory Berlin is also home to the first – and so far largest – startup campus in Germany, which made it the natural location for Europe’s first Startup Summit in 2015. Its partners include Google and Deutsche Bank, and it counts local success story SoundCloud as well as Twitter, Uber and Pinterest amongst its members. It’s testament to Berlin’s pull in terms of its tech scene – and it’s relatively small size – that such big names could all be found in one place. The hope, of course, is that proximity will lead to collaboration.

New, disruptive technologies

But what kinds of tech can we expect to blossom in the capital? Obviously there are a wide range of startups creating different models, from music streaming systems like SoundCloud to Fintech such as Number26, billed as “Europe’s most modern bank account.”

But thanks to the capital’s open mindedness towards new, disruptive technologies, Berlin is particularly popular with blockchain startups that use the technology behind Bitcoin. Names to watch range from Santoshipay, which enables publishers to monetise their content, to ALL4BTC, which allows users to shop at any internet store in the world, regardless of local restrictions.

berlin-capital-tech-2Also thriving in Berlin is the Internet of Things, the technology that enables the machines we use – be it our fridge or our heating – to collect and share information digitally. Star of the scene is Relayr, which, in layman’s terms, works on tools that enable companies like Bosch to make our kitchen appliances work more efficiently.

There are challenges of course. Some entrepreneurs are put off opening an office in Berlin due to the difficulties they might face when it comes to shutting it down – the law requires companies to keep books open for three to five years to clear taxes and any other financial obligations. Others claim that Berlin’s tech scene still needs to find it’s own identity, rather than replicate Silicon Valley, or even London. But if the venture capital is anything to go by, Berlin and its tech scene is where the smart money is heading.

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