Is Munich Europe’s #4 tech hub after London, Paris and Berlin?

Munich is a leading European tech hub, ranking fourth on the continent for both unicorns and future unicorns behind just London, Paris and Berlin.

A comprehensive new report marking the launch of the dedicated Munich startup database initiated by Munich Startup, and supported by HV VenturesTarget GlobalActon CapitalPoint Nine CapitalLakestarHandelsblatt Intelligence and WERK1 explores the startups, scaleups, and investment landscape making up the Munich tech ecosystem.

Report - Munich’s startup ecosystem report 2020

4th in Europe for unicorns and future unicorns

Munich has emerged as one of the most important tech hubs in Europe, and is now ranked 4th by the number of tech unicorns after just London, Berlin and Paris. Importantly Munich also comes in in 4th place by the number of potential future unicorns (companies valued €200M-€800M), demonstrating a strong pipeline of innovative high-growth startups.

Germany’s second tech city is home to over 1.3K startups, 114 local investors, 15K startup jobs, 243 corporates, as well as accelerators, support organizations and leading universities. The Munich startup database catalogues and complements all of these key stakeholders. Munich’s startups have collectively created over €17B in value since 2013, with names like Personio, Lilium and Sono Motors leading the way.

Rainer Maerkle, General Partner at HV Ventures told us: “We are strong believers in the ecosystem, driven by the mix of local talent, tech focus, university backing, availability of capital, as well as the attractiveness of the city. In Munich there’s a lot going on under the radar.”

Maturing ecosystem

Captured in the Munich startup database and in the report, we can see that the city has experienced a number of significant exits and has nurtured an impressive pipeline of established high-growth startups. Companies like Flixbus, Celonis and Ottonova are contributing greatly to the Munich ecosystem, with success stories acting as breeding grounds for talent, skills, and capital, providing strong fundamentals for the ecosystem’s future.

Frank Seehaus, Managing Partner at Acton Capital, headquartered in Munich said: “There is a long-standing tradition of vibrant tech and venture communities in Munich, enhanced by proximity to industry. Local industry and entrepreneurship can combine to create a powerful driving force. Examples like Cluno, with its founder team coming from traditional car wholesale, prove an ecosystem of emerging startups together with established industry is beneficial for both.”

Germany’s second city

After Berlin, the Munich metropolitan area, including Gilching (home to Agile Robots), and Weßling (Lilium), is by far the second most well-established ecosystem in Germany. Munich startups raised €1.4B in 2019, and is increasingly taking a larger share of total German funding, last year accounting for 29%, compared to 8% in 2014.

Some of Munich’s particular strengths in Enterprise Software, construction tech and companies adopting industry 4.0 technologies, though the city is also home to rising stars across nearly every industry vertical. These can all be explored in the recently launched Munich startup database, the fifth German ecosystem to come online, after BerlinRuhrOstwestfalen-Lippe and Cologne.

Munich in lockdown

The Munich tech ecosystem seems to be weathering the Covid-19 crisis comparatively well with overall VC investment in line with or above previous years’ levels, helped by large rounds for companies including Lilium (€250M), Personio (€68M), and Jenavalve (€45M). In addition, the number of rounds over €2M, a sign of ecosystem growth, is significantly above previous levels.

Munich clearly has strong ecosystem fundamentals, having produced 1.3K+ startups, 9 unicorns and 10 future unicorns so far. 114 investors including HV Ventures and large investing corporates such as Siemens, Allianz and BMW mean the support and capital are there to navigate a challenging time and push on in 2020 and beyond.

Report - Munich’s startup ecosystem report 2020