Based on population, startup founding activity in Munich and Berlin ranks almost equally at the top in Germany. Financing rounds are even more frequent in Munich relative to population and the number of startups.
One Analysis of the industry service Startupdetector According to the study, 2,289 startups were founded in Germany in 2019. Almost one in four startups was founded in Berlin (564), and just over one in six was founded in Bavaria. In North Rhine-Westphalia, 368 startup companies were newly registered in the commercial register last year. These raw numbers are initially not very meaningful for two reasons: Firstly, the population sizes of the federal states vary considerably. Secondly, startups are concentrated in large cities. To gain a more detailed overview of startup activity in Germany, the number of startups should therefore be compared to the population. Furthermore, a distinction should be made between cities or metropolitan regions and not between federal states.
The Startupdetector study identifies Berlin as having the highest startup intensity in Germany, with 15.47 startups founded per 100,000 inhabitants, followed by Hamburg (8.91) and Bavaria (3.14). Munich Startup also has access to the number of startups founded in the city and district of Munich determined by Startupdetector: 274. This results in a startup intensity of 14.34 startups per 100,000 inhabitants for Munich, with its 1.91 million inhabitants in the city and district. This places Munich just behind Berlin and well ahead of Hamburg in second place among the locations with the strongest startup activity in Germany.
B2B business models dominate start-up activity
Munich-based startups target corporate clients at about the same rate as all new German startups: 60 percent in Munich and 57 percent in Germany have a B2B business model. The startup scene in the Bavarian capital is quite diverse. The largest groups: 20 percent develop software, 13 percent work in the medical industry, 10 percent in the mobility sector, and 7 percent each in the e-commerce and industrial sectors.
High investment intensity in Munich
Berlin also ranks first in the analysis for financing rounds: Startupdetector provides figures from the second half of 2019. 272 Berlin startups were able to secure an investment during this period. Bavaria follows in second place with 232, including 185 Munich-based startups. This means that around two-thirds as many startups secured fresh capital in the Bavarian capital as in Berlin. Because Berlin has roughly twice the population of the city and district of Munich, and also roughly twice as many startups were founded, investment intensity is significantly higher in Munich.
Startups in the healthcare and software sectors completed the most financing rounds, both nationwide and in Munich. Investments into industrial startups were slightly more frequent in Munich than in other parts of Germany.
The capital for Munich startups in the second half of 2019 came from a total of 677 investors. Almost three-quarters of these, 495, were business angels. 110 VC firms and 36 corporate investors were active. Bayern Kapital closed the most deals in Munich (12), followed by High-Tech Gründerfonds (8), UnternehmerTUM and BayBG (7 each), and SEK Ventures (5).
