In Berlin, a startup hub emerges

By John Peabody
May 30, 2012

All the elements of a thriving tech/startup scene are coming together in Berlin. The engineers are there. The VCs are there. The local tech blog, aptly named “Silicon Allee,” is there, and now a new office complex, built in the structure of an old brewery and designed to bring entrepreneurs together, will soon be there. But don’t expect to get office space anytime soon as it’s already oversubscribed without even being fully built yet, Reuters reports.

Some 1,300 startups call Berlin home, attracting 136 million euros (U.S. $169 million) in funding. And as the tech scene in Berlin grows, it’s attracting the attention of international investors and entrepreneurs too, like LinkedIn co-founder Konstantin Geurike who just joined EarlyBird ventures, a Berlin-based VC dedicated to funding European startups. Another company, SoundCloud, launched in Sweden and relocated to Berlin to attract talent and take advantage of the international city’s thriving creative class. They’ll be the first major tenant in the brewery-turned-office space, which will have room for some 30 companies.

Other notable startups in Berlin include Spotify as well as Gidsy, which attracted the attention and capital of actor/investor Ashton Kutcher.

Affordable rent in Berlin is another major draw for aspiring startups. Companies in Berlin can expect to pay half of what they would pay for office space in Stockholm and a fifth of what they would pay in London.

Fred Wilson, of Union Square Ventures and cheerleader for the NYC startup scene, noted the rise of tech startups in Europe on his blog a year ago. Europe “is a place where interesting companies are getting started,” he wrote. “I’m bullish on the Internet startup sector all over the world but Europe is closer to NYC than most of the rest of the world, both in terms of how long it takes to get there and also in terms of culture, language, and a host of other things that matter in the relationship between entrepreneur and investor.”

And in another post, Wilson called out Berlin for being especially ripe for startup growth.

“Berlin and NYC are like sister startup cities,” he wrote. “They remind me of each other in many ways with Berlin a few years behind NYC in terms of its overall development.”

That’s the exact sort of opportunity that EarlyBird Ventures is trying to take advantage of. Click here to watch the Reuters report.

Image: People sit on illuminated bench at the Kurfuerstendamm Boulevard during the Festival of Lights in Berlin October 12, 2011. REUTERS/Fabrizio Bensch

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It’s not just in Berlin that startups are coming up with great ideas.

London’s Tech city is leading the way in the UK and with businesses such as http://www.carbidoff.com helping small businesses with car repair auctions, http://www.folioshack.com helping publish documents to mobile devices and http://www.thebackscratchers.com helping creatives collaborate and share. The London startup scene looks strong and has some great ideas emerging.

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