Berlin’s Cube Tech Fair last May 10 to 12 was a really impressive experience. Over 5.000 people and 250 of the most disruptive start-ups from 39 countries were in attendance. In addition, industry icons like Richard Browning, aka the real life Iron Man, co-Founder of Gravity, and Steve Wozniak were among the event’s high profile guests.
I was also impressed with the accessibility and depth of the event. In my experience, with events of this scale, it is impossible to participate in everything or to retain important information, as there is so much to see in so little time. The Cube Tech Fair Berlin on the other hand, was an example of how a newly-established but well organized event can provide a wealth of information in such a limited time and space. Seriously, I have nothing but compliments to the event planners. I was able to witness the competition pitches, every influencer speech, and visit over 200 exhibitors in only three days.
The Cube Tech Fair pioneered the 1 million euro pitch competition, an unprecedented format where start-ups have 3 minutes to present, with the winning start-up taking home a cool million euros. The jury, composed of 40 judges for 3 different rounds, with Steve Wozniak judging the final round, picked Enlitic, a medical deep learning company. They have developed AI that can read X-rays with greater speed and accuracy than human radiologist, and could become indispensable in detecting diseases.
The most important goal and achievement of this event was not funding the most promising startup, however. It was the link that it created between large companies and start-ups. To achieve it, there is no better place in Europe than Germany, the home of Bayer and Volkswagen, which are just some of the event’s partners. Furthermore, the capital Berlin, home to over 2,500 startups is, according to dealroom.co, ranked second in Europe in terms of number of tech start-up investment.
Berlin is certainly a good city to be an entrepreneur. To find out what exactly makes it such a fertile ground for business innovation, I sat down with Benjamin Rohé, Managing Director of GTEC (German Tech Entrepreneurship Center).
Benjamin Rohé has been based in Berlin for fifteen years ago—during the internet’s infancy—and he has witnessed the exponential growth. Nowadays, the investment packages are bigger and companies are reaching Series C much more quickly compared to five years ago. In fact, Mr. Rohé remarked that according to Corporate Venture Capital statistics, Berlin is reaching its peak this year. In 2015, Ernst & Young reported investments at €2.4 billion, second only to Silicon Valley). The Investitionsbank Berlin, the government’s regional economic development agency, says there are 70 percent more digital jobs in the city than there were in 2008.
Berlin is ranked second city in Europe in terms of number of tech start-up investment
All of this does not happen by accident. It is a combination of several catalysts: the rise of entrepreneurship, fresh ideas and new technologies to execute them with, a supportive financing structure and federal government, relatively affordable cost of living, Berlin being the chosen location of Soundcloud, Delivery Hero, ResearchGate, EyeEm, and other tech brands, all these make Berlin an appealing city for foreign investment.
Despite all this, Berlin still has to earn the title ‘The Silicon Valley of Europe.’ And there are many other cities vying for the title: Silicon Roundabout in London, Silicon Wadi in Tel Aviv, Isar Valley in Munich, with Paris and Barcelona in the running as well. Berlin has gotten off to a good start, but they need to come up with a Valley-beating product. To do that they need more investment capital, and not just from foreign sources, since that does not close the loop of startup investment. More local, long-term investors are needed to nurture the ecosystem, to produce successful entrepreneurs who themselves go public and fund others startups. This virtuous cycle is what Mr. Rohé and the City of Berlin is working towards.
Advantages of Berlin as a Start-Up Location:
▪ As an investor in a tech start-up, you get 20% of the investment pack from the State.
▪ Co-investment initiatives with the German State or the European Union doubles the investment of an angel investor.
▪ Grants and interest-free loans for certain periods.
▪ A program called Exist for students out of university to receive funding for 12 to 18 months to develop their product.
▪ A billions euro fund declared by German Government for later stage companies to do investment of 20 to 40 Million Euros.
▪ To hear the full interview with Benjamin Rohé, click here