A recent study found that Munich startups are extremely satisfied with their location. However, finding employees is a challenge.
Munich startups are very satisfied with the local startup ecosystem, according to a recent study by the consulting firm PwC. 96 percent of the 50 startups surveyed find the startup climate in Munich to be fairly good or very good. Of the 1,000 startups surveyed nationwide, only 86 percent are satisfied with their location. Founders rate the digital infrastructure on the Isar River particularly positively—98 percent find it at least good—and the startup scene, with which 96% are satisfied. Nine out of ten Munich startups like the opportunities for cooperation with established companies and the funding opportunities. 88 percent are satisfied with the proximity to universities, the infrastructure, and the access to financial resources. The positive results are also reflected in the fact that only one of the startups surveyed plans to relocate from Munich in the next 12 months.
“Munich offers the best conditions for founders and has established itself as one of the most important startup locations in Germany,”
says Michael Kramer from the PwC startup division Next Level Initiative.
Startups complain about recruiting problems
The list of negative location factors is led by the cost of living, with 50 percent of respondents dissatisfied. 38 percent are bothered by bureaucratic and legal hurdles, and 30 percent rate the availability of qualified employees as poor.
Among startups complaining about recruiting problems, 63 percent cite a lack of the necessary skilled workers. 38 percent consider applicants' salary expectations too high. One in five companies struggles with competition from established companies.
“In an economically strong region like Munich, startups face particularly tough competition for new employees — especially in the STEM field, where many large companies are also looking for people,”
says Eckhard Späth, Head of the PwC office in Munich.
"To win this competition, startups can no longer rely solely on flat hierarchies or a high degree of creative freedom. Salary is also playing an increasingly important role."
Only a few Munich startups receive venture capital
The vast majority of startups surveyed (80 percent) finance themselves from multiple sources. 90 percent invest their own money or family capital. Around two-thirds (63 percent) take out a loan. 22 percent receive public funding. 12 percent obtain capital through crowdfunding or lending platforms. Venture capital follows in the last place among the sources of funding: 10 percent received money from business angels, 8 percent from venture capital from companies, and 4 percent from private equity firms.
