A few weeks ago PwC published a study on the situation of German startups. The consulting firm is now presenting the results of the Munich startups surveyed and providing a good impression of Munich as a startup location.
The core finding of the Munich evaluation is: German startups are doing well, Munich startups are doing better. In the previously published nationwide study, a proud 70 percent anticipated future revenue growth, with three out of ten even anticipating double-digit growth rates. These positive results are even more impressive in Munich: 82 percent of startups from the Bavarian capital plan to increase their revenue this year, with four out of ten even anticipating double-digit growth.
This means the industry remains a growth and job engine: Nine out of ten Munich startups plan to make further investments in the next twelve months. Two out of three plan to hire additional employees, expanding their workforce by an average of 22 percent (nationwide: 16 percent).
Founders happy with location
The study attributes the positive future prospects to the location and the good infrastructure on the Isar River: Almost nine out of ten Munich startups surveyed are satisfied with the startup climate in the city. Furthermore, 62 percent of respondents rate the availability of fast internet in Munich as very good, compared to just 46 percent across Germany. For innovative, technology-driven companies, fast internet access is not only critical to success, but also a key factor in the location decision, according to the Munich PwC head. Eckhard Späth:
“That’s why it’s good that Munich is solidly positioned on this issue and that founders also perceive it that way.”
Universities and quality of life
The study also sees the local university landscape as a major advantage for Munich. 20 percent of Munich startups already collaborate with academic institutions. This compares to 16 percent nationwide.
“The knowledge transfer between Munich’s universities and young companies in the city works,”
says Späth:
“This lively exchange is one of the great advantages of the Munich ecosystem, especially for technology-driven startups.”
At the same time, universities also offer a steady supply of sought-after specialists: While 29 percent of startups nationwide have difficulty finding employees, the figure in Munich is just 18 percent. Across Germany, only one in four startups considers the availability of qualified employees to be very good, compared to more than one-third in Munich. In addition to the universities, the study authors also point to soft location factors:
“The economic power and high quality of life in Munich attract many well-educated people,”
says PwC expert Späth.
Are Munich residents lone fighters?
Of course, the analysis also looks for flaws and criticizes a certain lone-wolf mentality: 36 percent of Munich startups, 8 percentage points more than the national average, report that they have no cooperation partners. And 90 percent (nationally: 84 percent) use their own money for financing. Only 14 percent (nationally: 25 percent) rely on public funding.
