Munich's success factors for startups
Munich has a dynamic, cosmopolitan and well-connected startup community. Munich's robust support and proven structures support start-up entrepreneurs.
What Munich's startup ecosystem has to offer
Munich has a dynamic, cosmopolitan and well-connected startup community. All the latest news from the city's startup landscape is documented online at munich-startup.de , Munich's official startup portal for the city and surrounding region.
Munich's local government, the Free State of Bavaria and an array of chambers are hard at work to give startups the infrastructure they need. With the Technical University of Munich (TUM) leading the way, the city's institutes of higher education have anchored entrepreneurship in their courses of study, and have so far been highly successful in helping students and graduates launch new businesses.
As a first port of call the City of Munich is offering solid, free advice on starting a business . Customized information is offered, also in English, to provide a quick orientation. Both city and state also invest substantially in weaving high-quality networks for startups and entrepreneurs. Meetups, conferences, industry get-togethers and a host of other events regularly bring the Munich startup community together.
The Bavarian capital likewise boasts plenty of funding support, even though some observers would like to see more. Accelerators and incubators assist with financing rounds and put firms in touch with VC firms and business angels.
Munich's startup ecosystem at a glance
- Munich is one of the five hotspots for startups in Germany.1
- In 2019, Munich was able to increase its share of all startups in Germany in comparison to the previous year. ¹
- 63% of startups in Munich describe their location as excellent or good. This is the second highest level of satisfaction in Germany after Berlin. ¹
- Munich startups see the proximity to universities and the good connections as particularly favorable. ¹
- Startups in Munich are more optimistic than their peers in other German cities: On average, they‘re planning on hiring 14.7 new employees next year (German-wide average + 7.9 employees).¹
- Knowledge transfer works better in Munich: 20% of Munich startups cooperate with scientific institutes, compared to a national average of just 16%.3
- Sustainability becoming more important: According to the 2019 German Startup Monitor (DSM) 2019, some 36% of startups see themselves as active in the Green Economy and/or in the area of Social Entrepreneurship. Munich consults #Socialstartups on these topics and is also home to the SEA Akademie, a joint university-based institution.
- Green startups, whose products or services are part of the Green Economy, make up 21% of startups in Munich.10
The Munich Innovation Ecosystem by Muc Summit is a driving force for the strategic development of Munich’s innovation ecosystem. This facilitator brings together many ecosystem players in the policy, economic, academic, research, and technology community in Munich and Bavaria. They connect the local elite universities, entrepreneurship centers, ventures, startups, corporates, and its innovation friendly political environment as one of the most attractive high-tech regions and promote the local ecosystem internationally.
Benefits in every startup phase
Munich's robust support and proven structures cover all three of the startup phases that experts identify. The stated aim of everyone involved is to continually optimize these structures in line with current developments. The result? Startups in Munich are quick off the blocks, can grow healthily and become firmly established.
From the perspective of digitalization, too, Munich's standing as a high-tech region delivers crucial advantages.
Benefits in Munich
Our free, professional advice covers a broad spectrum of would-be startup entrepreneurs:
- Munich's Business Startup Office provides tailor-made and one-on-one consulting sessions (in other languages, too), video tutorials, business plan templates, startup checklists and more
- The Cultural and Creative Industries Team provides support specially tailored to cultural professionals and startup entrepreneurs in the eleven segments of the creative industry.
Effective entrepreneurship support is available from Munich's universities:
- The Technical University of Munich (TUM) is Germany's foremost startup university.² Based on the Californian model, its affiliated Center for Innovation and Business Creation “UnternehmerTUM” has, since 2002, been spawning around 70 startups a year.4
- In 2017, Ludwig Maximilians University Munich (LMU) ranked fourth in Germany and delivers efficient support for startups with its Entrepreneurship Center.²
- Run by the Munich University of Applied Sciences (MUAS), the Strascheg Center for Entrepreneurship (SCE) is similarly proactive, concentrating on interdisciplinary support with a practical focus.
- Munich's Social Entrepreneurship Academy (SEA) devotes itself specifically to young social enterprises.
Experienced development networks include BayStartUP GmbH, which runs the Munich Business Plan Competition, and GründerRegioM, whose offerings target students, women entrepreneurs, startups and self-employed persons with a migration background. These organizations arrange regular competitions, networking events, workshops and coaching sessions.
More than 1300 Munich startups are shown in the Munich Startup portal . More than a quarter come from the IT/technology sector, although startups from the mobility, health, energy and food segments are also well represented.9
Where does Munich's startup community meet?
Diary dates (continually updated) and yearly calendar
Munich's economic strength is rooted in a healthy mix of global players and innovative SMEs, all operating in potent and fast-growing industries. The strong spectrum of science and research also comes into play here. For startups on the lookout for customers, partners and funding, the conditions here are ideal:
- Wide range of customers and partners: Munich gives startups access to B2B customers and partners among the ranks of innovative global players, SMEs who are hidden champions, 7 DAX30 companies, 11 MDAX companies, 7 TecDAX companies and 8 SDAX companies.
- As an IT hub, Munich occupies first place in the EU, ahead of Paris and London. 5
- The German IKT Study 2019 highlights this leading position in Germany: Munich has the most firms and employees, significantly higher turnovers, and new startups with more employees on average.7
Munich is the most important German innovation hub with strong future segments—in IT and digitalisation with a focus on robotics, IoT and AI, as well as in biotechnology, medical technology, creative economy/media, automotive engineering, and aviation and space travel.
- Access to top talents: 17 universities offer an impressive range of technology courses. Munich is Germany's second-biggest venue for higher education. Two elite universities plus an array of other universities and research institutions (including the Fraunhofer Society, the Max Planck Society, the German Research Center for Environmental Health and the digitalization center ZD.B) attract highly qualified labor to the Bavarian capital, giving innovative startups in the city enviable access to a large pool of highly specialized experts.
- Munich is home to around 30 established accelerators, incubators and startup centers, e.g. well-established WERK1, gate or IZB.
- The Munich Urban Colab - Munich’s newest innovation center - in the northwest of the city center. The new building is around 11.000 m² in size and as of 2021, up to 250 startups will work there on solutions for the city of the future. There will also be a department for events.
- Digital Hub Initiative/federal funding in Munich: Since 2016/17, the Mobility Hub and the InsurTech Hub have been supporting innovative startups in these two specific industries.
- Access to technologies: Around 70 scientific and research institutions are joined by a broad research involvement from companies. This environment is so productive that Munich is among the ten most significant regions in Europe in 27 of 35 key fields of innovation. 7
- In the R&D field, a total of 28,600 employees subject to mandatory social security contributions work in Munich—almost three times more than the national average. Despite a nation- and statewide backwards trend, startup figures increased in Munich between 2013 and 2019 in knowledge and innovation-intensive segments.7
The who's and where's of the Munich startup community
Munich startup - Interactive map
Experience on international markets, a sharp focus on research and innovation and a highly dynamic labor market are characteristic attributes of Munich's economic life. For startups intent on continuing to grow and expand abroad, the benefits are obvious:
- Straight from startup to top innovator: A recent brandeins survey of the “Most Innovative Companies in Germany 2019” found that Berlin (66) and Munich (61) have more innovative firms than any other location in Germany. When looking at the Munich list you can see that Munich has the broadest range of startups working in innovative industries.6
- Venture capital in Munich: with excellent access to venture capital, Munich is one of the three German VC hotspots; following Berlin (29.1%) Munich and Hamburg (18,6%) are even.¹
- More than 50 venture capital and private equity firms have offices in Munich with dedicated points of contact for startups.
- Pitch events: UnternehmerTUM, the LMU Entrepreneurship Center and the Fraunhofer Institute specifically target contact with national and international investors. Conferences such as the Fraunhofer Venture, BioAngels, BayStartUP Venture Conference, Bits & Pretzels, Venture Wiesn and Cashwalk are forums that bring promising startups and suitable investors together.
- Munich startups lead the way on a national level: In 2018 Munich-based firms ChargeX, Toposens, Kumovis and Tubulis Technologies as well as Food Punk (based just outside Munich) all made it to the top ten in German startup competitions.8
- In Munich, large-scale financing also works well: In the last couple of years, large sums have been acquired by players such as Flixmobility (EUR 564 m / Nov 19), Celonis (EUR 290 m / Nov 19), Ottonova (EUR 60 m / Nov 19), Tado (USD 50 m / Oct 18), Freeletics (USD 45 m / Dec 18), ID Now (USD 40 m / Oct 19), Personio (USD 40 m / Jan 19), Proglove (USD 40 m / Sept 19), NavVis (USD 35 m / Dec 18), Konux (USD 33 m / Feb 19), Scalable Capital (EUR 25 m / Aug 19), xbAV AG (EUR 21 m / Oct 18), Inveox (EUR 17 m / Aug 19), Fazua (EUR 15 m / Oct 19), Hotelbird (EUR 3,5 m / Nov 19), Building Radar (EUR 5 m / Oct 19) und Wealthpilot (EUR 2,6 m / Oct 19).
- Nor is Munich a stranger to IPOs: Munich company Mynaric AG (a specialist for laser-based communication networks) floated shares on the stock exchange in October 2017. NFON followed suit in May 2018. Currently, the very successful champion Celonis is still heading towards an IPO. Scout24 Group is another well-known former Munich startup that already launched its IPO a while ago.
Referenced studies and surveys
¹ Deutscher Startup Monitor 2019 - Mehr Mut, neue Wege, Initiator: Bundesverband Deutscher Startups e.V. (BVDS), Herausgeber: PwC.
² Deutscher Startup Monitor 2017 - Mut und Macher, Initiator: Bundesverband Deutscher Startups e.V. (BVDS), Herausgeber: KPMG.
³ Start-up-Unternehmen München, a survey of 450 German startups – 50 of which are headquartered in Munich – conducted by auditing and consulting firm PwC in August 2017.
4 Süddeutsche Zeitung, Ulrich Schäfer, „Stanford auf bayerisch“, 24.1.2018, Wirtschaft, Seite 2.
5 Study of European ICT Hubs, European Commission, 2014.
6 brandeins-Umfrage: Die innovativsten Unternehmen Deutschlands 2019, Februar 2019.
7 Innovations- und Wissenschaftsstandort München, Prognos AG, 2019.
8 Die Top 50 Start-ups des Jahres 2018, Jan. 31, 2019, Für-Gründer.de, Frankfurt Business Media, part of the F.A.Z. publishing group.
9 munich-startup.de is part of the "Entrepreneurship Strategy Munich", a cooperative venture backed by the City of Munich, the Chamber of Commerce and Industry for Munich and Upper Bavaria, the higher education association 4Entrepreneurship and other stakeholders in the Munich startup community. For current facts and figures about Munich startups please visit the Munich Startup Insights section.
10 Green Startup Monitor 2018, Borderstep Institut für Innovation und Nachhaltigkeit in Kooperation mit dem Bundesverband Deutsche Startups e.V., April 2019.