Sorry VentureVillage, numbers don't lie – Paris outranks Berlin

Nov 20, 2012
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venture village fake logoScrolling through my twitter feed this morning, I came across a wonderful tweet by @VentureVillage, one of Berlin’s English language startup blogs (there’s also Techberlin & Silicon Allee, EU Startups, & others). The tweet commented on Startup Genome’s most recent report on startup cities, which places Berlin(#15), Paris(#11), and London(#7) in the top 20 European cities. Their article on the report goes into a bit more detail about the report, including numbers such as 7% female entrepreneurs in Paris vs. 4% in Berlin and 9% in London, as well as how 95% have higher education in Paris vs. 1:6 (16%) in Berlin.

The article seemed quite unhappy with its less than phenomenal improvement from last year (Berlin was ranked at #17 last year):

“[Berlin has] been bested by other, less obvious tech hubs such as Sao Paulo, Sydney and Paris.”

Unfortunately for Berlin, it seems that numbers don’t lie. Berlin is officially categorized as being in “hype” phase: stage 2 in a 6 stage evolutionary cycle of a startup ecosystem (seed, hype, independence, integration, expansion, contraction) – Paris & Berlin were noted as being in Independence & Integration stages. While it often seems that the city of Berlin hired a PR firm full-time to talk itself up, it cannot escape the inevitable question “What startups are being built in Berlin today?”

In the past few months, Paris has seen Deezer raise a $130M round of funding, as well as Criteo raise a Series D for a ~$850M valuation. Blablacar continues to roll out in new countries, and we’ve got VCs domestic & international who continue to invest in our tech-driven startups.

It’s not about City vs. City, it’s about City + City

While VentureVillage would love to see Berlin getting more than a bronze medal as a European startup scene, the fact remains that it’s not about which city outperforms the other – no European city will dethrone London as the European VC capital in the next 10 years – it’s about how each city brings value to the European ecosystem as a whole. London & Paris already have an albeit untapped connection by Eurostar, and London VC & Angels continue to invest in Paris, especially as France is going through somewhat of a VC contraction; nonetheless, the fact remains that, while London holds 32% of the VC market, France still holds 20%, while Berlin holds 19%, traditionally placed outside of Berlin in cities like Hamburg (source: ISAI).

People often ask me what I “think of Berlin” as if the city itself is a startup – and maybe that’s because there’s just as much risk of it falling apart in the next 18 months as any other startup. I don’t personally feel that way, but it’s certainly looked at as “yeah, I here ‘a lot’ is coming out of Berlin… like, Soundcloud, and…”

Name Five Berlin Entrepreneurs.

Personally, I like to play the same game with Berliners that I did with Londoners last week: Name 5 Berlin-based startups. I just named 3 above, so I’ll add in Dailymotion & Netvibes (or Jolicloud if you prefer) – all of these are internationally recognized names (with the exception of Blablacar, but give it a year or two).

Berlin – a promising future

We wrote a while back about the “Paris & Berlin – The facts you can’t ignore (part 1),” which reads in favor of Berlin, after writer/entrepreneur Nicolas Metzke went to NEXT Berlin. I am excited by some of the things that I see coming out of Berlin – it seems The Factory, a five-story incubator which hosts Soundclound among other startups, will become the unofficial center of Berlin’s tech scene – run of course by the wonderful Jenny Jung.