Berlin's buzzing with tech start-ups
There are signs that Berlin’s much-hyped tech scene is reaching a tipping point as the city’s creative regeneration gathers pace
AT FIRST GLANCE, the huge old soap factory by the River Spree looks dilapidated and run-down, the giant old chimney missing many of its red bricks, some of the windows boarded up, the walls covered in graffiti.
The old factory’s apparent state of disrepair could be seen as emblematic of modern Berlin’s chronic dearth of industry, except that today the factory goes by the name of Kater Holzig and is one of the city’s coolest nightclubs, a sprawling haven of techno and trance in a brilliantly refashioned post-industrial landscape. It’s impossible to imagine a more appropriate symbol for modern Berlin’s capacity for creative regeneration.
But that creative regeneration isn’t restricted to music and art. At the end of last month, the old factory played host to a two-day festival that welcomed some of the city’s brightest and most ambitious young residents, who came together to celebrate and assess the latest phase of Berlin’s reinvention, as it quickly becomes one of Europe’s leading technological start-up hubs.
The Tech Open Air Berlin (TOABerlin) festival, a sort of mini-Electric Picnic for the city’s booming chic geek set, attracted an international crowd of young entrepreneurs, designers, coders, investors and journalists, just the latest sign that Berlin’s much-hyped tech scene is reaching a tipping point.
“This is a special place in terms of critical mass, the trajectory it’s on and where it’s heading,” says Ciarán O’Leary, a partner with the German venture capital firm Earlybird, which relocated to Berlin last year to be closer to the burgeoning start-up scene that TOABerlin exemplifies.
“Since 2008, there’s been 1,500 new start-ups founded, last year alone it was 500. Which is at least in the top three worldwide – some people say that in terms of founding rate it’s number two behind Silicon Valley.”
O’Leary, an Irish-born, German-raised investor, is convinced that Berlin has many of the ingredients required to become one of Europe’s main technology start-up centres: “The scene as we know it today is very vibrant, very international. There are teams from the US, from Spain, from the UK, from Asia – you don’t just have the best German entrepreneurs, but you’ve got the best teams from around the world, which is a sign of approval.”
The tech scene in Berlin was originally dominated by the three Samwer brothers, whose controversial business model involves quickly building European equivalents to big US success stories such as eBay, Groupon and Pinterest, and often selling them back to the originators for big sums.
They are hugely successful, but the copycat nature of their approach lead to Wired magazine recently describing their company, Rocket Internet, as a “clone factory”.