The 5 cities with the highest startup activity in Germany 2020

Regions such as Stuttgart/Karlsruhe or Rhine-Ruhr are becoming increasingly more popular when it comes to deciding which German start-up locations are most sustainable for scale-ups in Germany. In addition, the competition between the two cities of Hamburg and Munich is becoming more intense and is generating their first Unicorns. This article is only a summary of the five most important German start-up locations. Each of these cities/regions will be presented in a series of articles, which will take a closer look at the interaction between industry, politics, universities and start-ups.

1. Berlin

Berlin is still the largest and most important location for start-ups in Germany in 2020. With Brexit, Berlin is also becoming one of the major hubs in Europe. In a study by Startup Blinkest, Berlin is ranked 8th among the world’s most attractive regions to found a start-up.

Berlin is particularly attractive because of its comparatively low cost of living, access to talent from all over the world, and the opportunities to finance your own business. EY’s Startup Barometer shows that Berlin start-ups receive more than 1/2 of the total German investment volume. Three out of the five largest VC deals in all of 2019 have been collected by Berlin-based start-ups. Most startups in Berlin compete in the business-to-consumer (B2C) segment.  

3 Startups from Berlin

Auto 1 – The used-car marketplace was founded in 2012 and is now active in more than 30 countries. In 2018, the Japanese Softbank invested 460 million € in Auto1  (Valuation > 3 billion €). It is being speculated that in 2021, Auto1 will go public. 

N26 – Number 26 is a digital bank that has held an official banking license since 2016. In 2020, the company secured more funding in order to expand into the US market.

Tier Mobility – Tier is a shared micro-mobility company founded in the boom of electric scooters. Tier is currently the market leader in Germany in a highly competitive market (Lime, Bird, Voi, Circ…).

Big 3 Industries in Berlin


Ad-Tech (Advertising Tech)

(Micro-)Mobility & Travel

Investment volume in Mio. € - Purple (2019) & Grey (2018)
Investment volume germany

2. Munich

Munich is consistently ranked among the cities with the highest quality of life in the world. There have also been positive developments in the start-up scene in recent years. First and foremost led by the universities: LMU Munich and TU Munich (1st place among universities for founders in German Startup Monitor). Joint programs like the Center for Digital Technology and Management (CDTM) strengthen the ecosystem. Another central role is played by the UnternehmerTUM in Garching and the associated Manage&More program. 

Although there are far fewer VCs in Munich, some, such as Earlybird or Acton, have their headquarters in Munich. In addition, the greater Munich area has an industrial location advantage with 6 DAX companies, which explains the high number of B2B start-ups.  Munich is becoming the place to be for deep tech startups. 

3 Startups from München

Flix Mobility – After gaining monopoly status in  Germany (> 90% Marketshare), Flix Mobility strives to become Europe’s largest coach platform operator. Even more, Flix Mobility is developing its own train network in Germany (FlixTrain) offering routes from different major cities (Cologne – Hamburg, Stuttgart – Berlin). 

Celonis – Celonis develops software that enables enterprises to visualize processes and gain insights on hidden process knowledge in order to optimize those. Germany’s largest public company SAP resells this software together with Celonis as „SAP Process Mining by Celonis“. 

TeleClinic – Especially during the COVID-19 pandemic, TeleClinic’s solution gained popularity across Germany. As a customer, you are able to have your doctor’s appointment completely online paid by your insurance company. 

Big 3 Industries München


Healthcare Tech

IoT/AR – Deep Tech

3. Hamburg

By many recognized as the most beautiful city in Germany, Hamburg is not only the largest city in the EU that is not a national capital but also an important location for the German start-up scene.  In terms of inhabitants, even more people found a startup in Hamburg than they do in Berlin

In addition to a strong media industry, many US companies such as Twitter, Google, Facebook and Snapchat have their German headquarters in the Hanseatic city of Hamburg. 

Hamburg is also the center of the video game industry in Germany, companies like InnoGames, BigPoint, Daedalic Entertainment or GoodGame Studios all come from the North. Over the last years, Hamburg became an important Insur/FinTech hub.

3 Startups from Hamburg

About You – The Otto Group’s e-commerce subsidiary is enjoying ever-increasing popularity, which may be due to its collaboration with influencers. In July 2018 About You became a Unicorn, after financing of 300 Mio€. 

Deposit Solutions – Deposit solutions is an Open-Bank FinTech company and the second-largest FinTech company after N26 in Germany. The platform allows banks to offer attractive third party deposit products to their own customers through their existing accounts

Xing – The career network Xing, with its 15 million users in the DACH region, is still a larger than LinkedIn, the competition from Mountain View, USA. Xing is often the No. 1 platform, especially for German medium-sized businesses. 

3 wichtige Branchen in Hamburg



Fin/ InsurTech

Startup activity by region

4. Rhein/Ruhr

With 12 million inhabitants, the Rhine/Ruhr metropolitan region is the most populous region in Germany. The transformation from the coal and steel industry to innovative digital business ideas is a sluggish rather than exponentially growing process.

A change of government took place in 2017. The Social Democratic-Green government lost its majority to the Conservative-Liberal coalition led by Armin Laschet. Especially exciting for founders is the Founder’s Scholarship NRW.  It supports 1,000 startups/ founders for 1 year with 1,000 € per month, so that they can fully dedicate themselves to the development of their startup. 

Whether this system is transferable to Germany will become visible in the next few years. It will certainly not harm the founding location NRW and Rhein/Ruhr. 

3 Startups from Rhine/Ruhr

DeepL – Is an online translation tool using state of the art machine learning algorithms. In various benchmarks, DeepL performed better than Google Translate and other competitors from Microsoft and Facebook. Its API makes it very popular among developers.  

Jobmensa – One of Germany’s most popular student job boards. Holtzbrink Ventures invested in the portal, which was founded in Cologne in 2008, and is the company’s largest shareholder.

Just Spices – Just Spices brings a breath of fresh air into the kitchen with a large selection of spices, spice mixtures, and the appropriate accessories. Becoming extremely popular due to all their social media campaigns on Instagram and TikTok.

Big 3 Industries in Rhein/Ruhr


MarTech (Marketing)


5. Metropolitan Area Stuttgart/Karlsruhe

The Stuttgart / Karlsruhe area is similar to Munich in many ways. The foundation for the start-up boom here is also provided by the universities, especially the KIT (Karlsruhe Institute of Technology).  According to the WiWo Uni Ranking 2018, the study programs Computer Science (1st place in DE), Mechanical Engineering (3rd place) and Electrical Engineering (2nd place) performed particularly well. 

Similar to Munich, the region benefits here from strong traditional industries, including companies such as Daimler, Porsche and Robert Bosch. It is therefore not too surprising that most of the start-ups have a strong B2B focus and try to profit from this cluster. 



3 Startups from ST/KA

Curavec – Curavec is not a classic start-up with its foundation in 2000. Nevertheless, it caused a sensation when the Bill and Melinda Gates Foundation invested 46 million in the Tübingen-based biotech company in 2015. Also it appears in the newspapers by working on a COVID-19 vaccine. 

Volocopter – Volocopter is one of the two biggest companies in Germany (Lillium in Munich) working on the vision of enabling people to use electric autonomous air taxis for traveling low to middle-range distances.

TeamViewer – Beinig one of the first Software startups in Germany, TeamViewer enables it users to collaborate via remote control, screen sharing, and file transfer. In 2019 TeamViewers IPO was one of the largest tech IPOs in Germany. 

Big 3 Industries in Rhein/Ruhr



IoT/AR – Deep Tech

Top 10 Gründer Hochschulen

Sources and Resources

  • Deutscher Startup Monitor 2020
  • Deutsches Startup Barometer 2018
  • Uni WiWo Ranking 2018
  • Unternehmens Infos: Mischung aus Gründerszene, Handelsblatt, Wikipedia und ÜberUns Seiten des Unternehmens

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