While Berlin has had something of a bad reputation for producing German copycats of successful U.S. companies, Gidsy is an example of the start ups that are availing of the city’s many advantages while focusing on the international market.
Others include hip mobile app companies like Amen or 6Wunderkind, as well as firms like Delivery Hero, an international network of food delivery sites, or Tape.TV, the Internet’s answer to MTV, which is launching in France and the UK.
"Most of the start-ups I know in Berlin usually have a global focus,” says Boegli of Tweek.TV. Her company, for example, which was only founded late last year in Berlin, already launched in the U.K. at the London Web Summit in March.
There are, of course, also drawbacks to being in Berlin. For one, it can be hard to find investors on the ground, so many companies have to go abroad to get financing.
There are fewer VCs in Germany than the U.K. or the U.S., and traditionally German financial institutions can be quite risk averse, preferring safer bets than start-ups for their investments.
One rare example of a German VC getting in on the Berlin action is Earlybird Venture Capital. The Munich-based company set up shop in Berlin last summer, and last month it announced a $100 million venture fund for European tech and Internet start-ups, focused mainly on German-speaking countries.
This, however, is not enough, given the amount of start-ups that are coming out of Berlin, argues Pawel Chudzinksi, of Point Nine Capital, an early stage venture capital fund based in Berlin.
“So many start-ups get financing rounds only from international investors,” Chudzinksi says. “For me, it is a signal that the place is not well financed at all.”
Point Nine Capital invests a few hundred thousand euros in start-ups in Germany and other parts of Europe, and sees itself as positioned somewhere between the few angel investors in Berlin and the likes of Earlybird which invests one or two million at a slightly later stage.
Chudzinksi argues that there are great investment opportunities in Berlin. “In terms of people who want to invest in tech, it’s a great field. As an investor, in San Francisco there is unlimited money and a limited number of projects, and here the number of projects is also limited but the money is even more limited.”
As well as the financing challenges, Berlin is at some stage going to have to live up to the increasing hype. Despite the success stories, so far there is no sign of any companies to rival the likes of Google, Twitter or Facebook.
Yet, Dekker of Gidsy points out that the start-up scene is really in its infancy.
“One of the biggest differences from say New York or San Francisco is that it is very, very early,” he says. “There are loads and loads of people moving to Berlin, and there are a lot of companies doing really well. On the other hand, it’s just been a few years. I think it will be interesting to see where this goes.”