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Young woman in a start-up in Berlin

„Only in Berlin“ – Why Berlin is the Start-up boomtown

For Denis Altschul, where to establish his company was never a question. „The problems we solve with our products can be found all over the world,“ says the Brazilian. „But founding the company – that could only happen here in Berlin.“ Frenchwoman Jena Bautmans didn’t have to think twice either about where she would set up her fashion label – in the European start-up metropolis, Ber-lin, of course. What does Berlin offer that other cities don’t? Why does Berlin, with its 3,000 start-ups, manage to outstrip other major cities as a start-up hub?

From São Paulo to Berlin

Denis Altschul, Fonder of TOCA product design Start-up in Berlin

Denis Altschul was 11 years old when he visited Berlin for the first time – with his grandmother, who had emigrated to Brazil in the 1950s. Five years later, he came to the German capital for a year on a student exchange – and was hooked. When he returned to São Paulo, he knew he would come back. With a small detour via Passau, where he studied media and communication, his path finally took him to Berlin.

Here he set up one of the first large coworking spaces and worked in project management. He always had his eyes on the topic of communication, and at some point the question of the side effects of too much communication technology came into focus – the radiation emitted by cell phones, the addiction to compulsively looking at one’s phone all the time, the danger of being spied on via the little all-rounder devices.

Together with media artist André Hostalácio, also from Brazil, Altschul developed a 100 per cent radiation-free cell phone case that blocks all smartphone signals, „in fact a portable, non-locatable dead spot.“  

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Fertile ground for start-ups and creative thinking

To market their No Signal Sleeves, the two Brazilians founded their company TOCA product design – in Berlin. „The city offers fertile ground for start-ups. Here you find people who are willing to collaborate on innovative ideas, who are open to new things,“ says Altschul. „And who give you the time needed to test innovations.“ In São Paulo, people tend to be much more career-focused and don’t have the time to think deeply about innovation. „There, your whole life is fully determined. Job, car, wedding, house, children.“

Berlin gives you the choice of how you want to live your life. „Here you can still live on a shoestring and tinker with ideas,“ says the 33-year-old. „Because material things aren’t above everything, people can think more creatively here.“

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Conquering new markets with the savings bank at your side

After a year of research and development, TOCA was launched at the end of 2017 with €20,000 in seed capital and a company account at Berliner Sparkasse, „a bank with a vast experience“. The service is absolutely decisive as a selling point. „The business hotline works great,“ says Altschul. „That saved me a lot of hours I would have spent on hold elsewhere.“ He has just applied for a corporate loan. „With the support of the Sparkasse, we want to conquer additional markets in Europe.“ The advice from the Sparkasse also helped him to optimise his business plan. „It allowed us to prove that our company had potential.“

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Berlin is not looking back, but ahead

Jena Bautmans (32) is also looking to grow her start-up, Jenah St. „We want to become a model company for animal-free fashion across Europe,“ says the Frenchwoman. Her second collection, produced in Portugal, has just been launched. But as a location for her company she could not imagine any city but Berlin, says the entrepreneur, who has already seen a lot of the world.

After studying law and graduating from a Paris business school, she worked for an international Internet company in Bangladesh, Myanmar and Pakistan before following her heart’s call and moving to Berlin. „A lot of other cities are proud of their history, are so staid and sedate,“ Jena says. „Berlin is not looking back, but ahead. That’s what makes the city so attractive for trying things out – projects as well as identities.“ And of course, what makes Berlin appealing is its multiculturalism.

Jena Bautmans, Fonder Jenah St. of Start-up in Berlin

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Networks and great support

Together with a friend from Berlin and another founder, she launched a bag label for young people. But because she no longer wanted to be part of a company that traded in animal skin, she dropped out and founded her label Jenah St., in which she completely refrains from using animal products. „The fashion pieces you wear should express what you stand for and the values you support,“ says Bautmans. The people in Berlin understand this. She also received „great support“ from the Berliner Sparkasse. „I had very good interactions with the customer advisor at the savings bank right from the start. She was available when I needed her. This support gave me courage.“ It also helped her that her contact at the savings bank was a woman.

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Capital of good financing opportunities

Start-up customer advisor at Berliner Sparkasse has the best tips for founders

That woman is Oleksandra Ambach. At Berliner Sparkasse, she supports start-ups with innovative and/or digital business models. Berlin is popular with founders of foreign origin because it is the „capital of good financing opportunities“, especially in the early stages, says the 28-year-old. „There are a lot of equity providers here.“ Start-up financing with outside capital is quite challenging, but possible, even after break-even, says the native Ukrainian, who, after studying economics in her home country, went on to study finance at the European University Viadrina in Frankfurt (Oder).

Because she is an expat herself, she can well understand the worries of founders from abroad. „Germany is quite bureaucratic,“ says Ambach. Health insurance, bank account, residence permit – after arriving in Germany you are confronted with many things at the same time. „You need a good partner to meet you where you are and explain what makes the world tick in Germany.“ The Sparkasse wants to be that partner. „We are often the first port of call.“  

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Savings bank as central contact for entrepreneurs

Berliner Sparkasse knows „the ins and outs of start-up structures“, says Ambach, is well networked in the start-up scene and knows where to find equity providers. Whether it is a question of promotional loans from Investitionsbank Berlin or from KfW with a public deficiency guarantee, „we work closely together on this, reviewing the business plans, making a funding decision and supporting the start-ups all the way to the expansion phase, meaning the founders only have one point of contact.“

The start-ups that Berliner Sparkasse supports have employees from all over the world – France, Brazil, India, many from Silicon Valley. „And since Brexit, many start-ups from the United Kingdom are relocating their headquarters to Germany,“ says Ambach. Innovation cycles are becoming shorter and shorter. „There are more and more lean start-ups. They immediately go to market, test their product, change it, test it again, change it some more.“ The speed of development is increasing. „We have to keep up with that as a bank, too,“ is how the financial advisor puts it. The start-up scene is becoming increasingly international, and teams of entrepreneurs are becoming more and more mixed in view of the shortage of skilled workers in Germany. „Sometimes it’s easier to look for employees at an international level,“ she says of the common recruiting practice.

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The most multicultural of all German cities

Her business is supporting young people from all over the world who are drawn to Europe and Germany – students, trainees, young professionals. Via a digital platform, EDUBAO helps them to overcome the hurdles of bureaucracy, from university applications to visa applications. „We want our customers to be able to do all their administrative tasks digitally while still in their home coun-tries,“ says Le. China, along with India, is their biggest market, followed by the Maghreb countries. Many of the students she supports would like to found companies later, she notes. Berlin, as the „most multicultural of all German cities“, is a good place to do so. „It’s helpful to find compatriots in a city. And even better if they’re compatriots who have already founded their own businesses.“

However, a knowledge of German is indispensable in the long term. „It’s different from going to Asia as a company founder,“ explains Le, who herself gained experience in Singapore, Beijing and Shanghai. „All Asians speak English, so Europeans don’t have to learn the local language to compete in an Asian country. In Germany, on the other hand, you don’t even get your work permit if you can’t prove you have at least B1-level German.“ Do expats who come to Berlin approach entrepreneurship differently than locals? Le shakes her head. „The type of start-up depends more on the industry than the country of origin.“

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Mixed team in the lively start-up scene

Nga Le Founder of EDUBAO GmbH, Start-up in Berlin

The team at EDUBAO GmbH, which Nga Le founded three years ago with a co-founder, also includes people of various nationalities. The 45-year-old initially registered her start-up in Munich, but then relocated the headquarters to Berlin. „The start-up scene in the capital is more vibrant.“

Nga Le has Vietnamese roots, grew up in Berlin, moved to Munich to study business, then worked as an employee at a large insurance company. „You should be familiar with your industry before you start your own business,“ she believes.

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✉     expats@berliner-sparkasse.de 

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