In terms of existing unicorns – startups valued at one billion US dollars (800 million euros) or more – Munich ranks fourth in Europe. Only London, Paris, and Berlin currently boast more unicorns. Since 1990, nine companies in the Bavarian capital have reached a billion-dollar valuation. Stockholm and Amsterdam have the same number of unicorns, Paris has 10, and Berlin has 11. London, on the other hand, boasts 45 unicorns, which not only demonstrates that the British capital is in a different league, but also that continental Europeans still have a lot of catching up to do.
A similar picture emerges when looking at the potential unicorns of the future. These are defined as startups valued between €200 million and €800 million. London leads the field with 68 potential unicorns, while Munich ranks fourth with 10. While this means Munich could significantly expand its lead over Stockholm (5) and Amsterdam (6) in terms of unicorns, Paris (36) and Berlin (29) would also widen the gap to the state capital.
The Munich startup scene under the microscope
Munich's startup scene is characterized by its great diversity: There are over 1,300 startups in total, creating over 15,000 jobs. There are promising potential unicorns in all industries, such as Yfood in the food sector, Scalable Capital in the fintech sector, Ottonova for healthcare, Leon Nanodrugs in the biotech industry, Personio as an enterprise software provider, Sono Motors in the mobility sector, Proglove in Industry 4.0, and Tado as an example of the Internet of Things sector. In addition, there are 114 local investors, 243 corporates, as well as accelerators, aid organizations, and, of course, internationally renowned universities.
Over the past seven years, Munich-based startups have collectively achieved a market capitalization of over €13 billion. In terms of investments, over €1.9 billion was raised in 2019 alone – a sum that could be surpassed this year despite the coronavirus pandemic: By the middle of the year, the total amount of all financing rounds for Munich startups had already reached €687 million.
Munich-based companies are thus attracting an increasingly large share of the capital invested in startups across Germany. While only 11 percent of all funding went to Munich-based startups in 2015, they already accounted for 21 percent of this in 2019. For the year 2020, which is still ongoing, the figure is even higher at 29 percent. Clemens Baumgärtner, Minister for Labor and Economic Affairs of the City of Munich, explains:
"The Munich Startup Report impressively demonstrates: Munich is firmly established as a European hub for young tech companies. The state capital's excellent startup ecosystem supports startups in their growth. This allows them to become unicorns, bringing even more innovative power and dynamism to our city."
And Gabriele Böhmer, Head of Entrepreneurship Promotion at MGH and Editor-in-Chief of Munich Startup, adds:
"The investments in Munich startups, as well as the presence of numerous national and international accelerators, demonstrate that the city occupies an important position in the startup scene. We are optimistic about the coming years, in which many more startups will surely be founded in Munich and grow into Bavarian unicorns."
Consequences of Corona for startups in Munich
The coronavirus pandemic can hardly dampen these expectations, as Munich's ecosystem has weathered the crisis very well so far. This is evident from the second quarter of 2020: Total VC investments are at the same level as in the same quarters of the previous year. This is not only due to the large rounds for companies such as Lilium (35 million US dollars), Xbav (25 million euros) and Kaia Health (23 million US dollars). The number of rounds above €2 million and the total number of VC rounds were also higher than the same quarter last year.
Gabriele Böhmer explains the good financing situation:
"Since the healthtech sector is particularly strong in Munich, there were some startups in the city that actually benefited from the developments due to the coronavirus crisis. Startups in other sectors have, of course, been hit much harder by the crisis, and the negative consequences will only become apparent in the statistics with a delay. However, our Data & Insights dashboard will help us track upcoming developments in the startup scene and ultimately assess how well or poorly our ecosystem has weathered this pandemic."
About the study
The analysis is based on the data of the Data & Insights Dashboard, which was launched by Munich Startup and Dealroom.co was launched in 2008. Other project partners are HV Ventures, Target Global, Acton Capital, Point Nine Capital, Lakestar, Handelsblatt Intelligence and WERK1.
The complete study can can be downloaded here.
