The German start-up capital has been in a moderate crisis of meaning for several years. Anyone who wanted to start a tech company in Germany in the early 2010s couldn’t ignore the capital. It’s not as if there haven’t been any exciting companies growing up in Berlin in recent years. But other locations have caught up in terms of new start-ups and financing volumes; Munich has even overtaken Berlin as the most important German start-up market.
Berlin had specialized in consumer applications for years, especially in online retail. It was much less about technical breakthroughs or groundbreaking ideas, but rather about perfecting already known business models and what Berlin founders would describe as “operational excellence”.
However, investors are becoming more and more interested in technically highly complex solutions that are aimed more at other companies than at end users. The commercialization of Germany’s excellent basic research came into focus. Cities such as Aachen, Dresden and Munich with technically strong universities have benefited.
New self-confidence through AI applications
Many stars of the German start-up scene in recent years have come from Munich, not Berlin: the rocket start-up Isar Aerospace, for example, the drone developer Helsing, the software start-up Celonis. The widespread failure of fast supermarket delivery services such as Gorillas, which grew rapidly after being pumped full of investors’ money, but collapsed again just as quickly after the end of the corona pandemic, also severely damaged Berlin’s self-image.
But in the last few months a new self-confidence has been noticeable in the Berlin start-up scene. This is mainly due to the market trend towards applications based on artificial intelligence (AI). In the world of AI applications, Berlin is once again benefiting from its old founding virtues: you don’t have to reinvent the wheel, but you do have to build and scale highly efficient organizations as quickly as possible. With companies like n8n, Parloa, Langdock, Peec AI and Langfuse, a new, highly ambitious generation of Berlin AI founders is currently emerging. They are very early in their development and have yet to demonstrate their long-term success. But there’s really something going on in Start-up Berlin again – that can’t hurt.
