© Andreas Heddergott - LH München

SCALE: Munich Is Part of a Leading Startup Ecosystem

The Startup Cities Alliance (SCALE) unites numerous cities under the goal to further promote, strengthen and network the European startup ecosystem. Topped only by the US and China, this competitive ecosystem has major potential for growth, as is demonstrated by a recent report. And Munich plays an important role.

The cities Amsterdam, Antwerp, Barcelona, Berlin, Cologne, Hamburg, Helsinki, Lisbon, Munich, Porto, Rome, Stockholm and Vienna form the SCALE network. The shared platform offers access to current information about accelerators, incubators, soft-landing programs and calls for financing in each city. The aim is to help startups and investors discover new markets. With the new Ecosystem Map – which, just like Munich Startup Insights, was created in collaboration with dealroom.co – SCALE now offers a far-reaching overview of the European tech ecosystem.

“We’re incredibly proud to finally launch this unique collaboration with dealroom.co. We believe it is a direct and realistic example of how we as European startup hubs can start to draw conclusions across cities as well as industry-specific comparisons, which will improve the efficiency and availability of data among our ecosystems. With this innovative platform, we’re taking a further step in our plan for a pan-European ecosystem,”

explained Kriya Mehta on behalf of SCALE.

“By collaborating with Dealroom, it is possible for SCALE to present the diverse European startup ecosystem a simple yet comprehensive and detailed overview for the first time. From our own experience with Dealroom, we know how well the solution has been accepted by the ecosystem. We’re excited about supporting this project and making a contribution by providing high-quality data from Munich,”

added Gabriele Böhmer, Director of Munich Startup.

Major potential in the SCALE network

According to the report “Creating Europe’s most connected tech hubs,” there are currently 54 unicorn startups in the cities in the SCALE network as well as potential for 78 more. Internationally, this means the network comes in fifth place after the Bay Area (374 unicorns / 471 potential unicorns), New York (100/179), Peking (120/118) and Shanghai (69/82). With more than 30,000 startups in total, the network even takes second place in the world after the Bay Area (32,000).

A look at the amount of funding raised from 2016 to 2020 shows there’s room for improvement. With a total of 31.4 billion euros, the network comes in sixth place. Cities like New York (70 billion) or Peking (102 billion) deliver significantly higher figures, but the top spot is taken by the Bay Area with 183 billion. If this is considered in proportion to population – where the SCALE cities top the list with 49 million, followed by Shanghai with 34 million – it becomes apparent just how much potential awaits.

“The latest investments in Berlin and other European cities show the strength of European startups. With the SCALE city network and the report that was published today, Europe is showing the expertise of its startups. Berlin is proud to be part of SCALE Cities,”

said Christian Rickerts, State Secretary of the Berlin Senate Department for Economics, Energy and Public Enterprises.

Little capital from local sources

The European ecosystem, however, still very much depends on international investors. If you look at the last two years, a mere 20 percent of investments in the cities in the SCALE network came from local capital investors, and a further 38 percent came from European investors. Important investors come most particularly from the US and Canada with a share of 32 percent. In Shanghai and the Bay Area, in contrast, a good three quarters of the investments come from local investors. This becomes particularly apparent during bigger rounds of financing: If a startup in one of the SCALE cities raises more than 250 million euros, only five percent of that participation is from local investors.

“By working together, we will not only be able to support the growth of companies, but will also create strong, interconnected ecosystems where people like to live and work. We are pleased to be a part of SCALE to promote these objectives,”

said Filipe Araújo, Deputy Mayor of Porto and Councilman for Innovation and Environment.