Beyond Berlin: Why not startup in Hamburg?

When people think about the German startup landscape, most minds immediately go to the hype of Berlin, or the technical excellence of Munich. However, Hamburg, a coastal city in the north of Germany is distinguishing itself as an incredible destination for startups.

Here are ten serious reasons why you might want to consider Hamburg for your startup (and one playful one):

1. Considerable political initiatives supporting the startup scene.
   The city-state’s government has made startup development a priority. One of the outcomes is an excellent English/German language website that serves as a portal for news about the entire ecosystem, driven by the city itself alongside a dedicated team. Similarly, the Hamburg Chamber of Commerce addresses startups specifically in English.
2. It’s easy to find your tribe.
   The Hamburg Startup Monitor, a database for companies to list their profiles, develops live data from the startup ecosystem, to show startups found in Hamburg, the stage and the business models. Companies can also be searched for easily by industry, size and a host of other criteria. The Berlin developer HR firm Honeypot, which launched a Hamburg office in 2016, put together a comprehensive ecosystem report on the startup scene there, highlighting lots of promising companies working in Games, AdTech and FinTech.
3. Hamburg is a smart city.
   Hamburg has been called the world’s first Seatropolis due to its use of smart tech to connect people, processes and data across both public and private sectors. In 2014, the city made a strong commitment to utilizing Smart City solutions. Under the banner “City of innovations, city of the future“,  the metropolis outlined an encompassing approach to incorporating technology in the construction of a futuristic city. The wide approach and success of this strategy has launched a number of pilot projects (outlined in English) aimed towards improving liveability in many areas of the city. Smart city solutions connect people with citizen services, switch on streetlights and report traffic data through sensors on roadways. Local startups Floatility and Breeze have partnered with corporate, university and ecosystem partners to bring their tech to the wider city.
4. Help for international founders and employees.
   Resources such as the Hamburg Welcome Center and Make it in Hamburg! make international hiring and adjustments easier. The Hamburg Welcome portal contains a host of information in English on living and housing, with additional information on studying and learning German. It helpfully explains the different forms to be submitted, checklists that must be followed and the procedures on how to register and change residence. Make it in Hamburg! helps to provide a comprehensive support in many languages to accompany newcomers through the various steps, including integration to the job market, schooling or the recognition of foreign qualifications and diplomas.
5. A long tradition of industry.
   A port city, Hamburg is one of the largest economic centers of Northern Europe and is home to top employers such as Airbus and the Otto Group. The city boasts strong expertise in shipbuilding, media and commerce. It is also home to many corporates for startups to partner with. These corporate partners have similarly sought to develop the city’s attractiveness to startups, among them is Next Media.Hamburg’s StartHub. They have developed a comprehensive starter kit for digital founders and new international entrepreneurs in Hamburg. Otto Group has taken a different strategy: Investing in local startups to the tune of over 50 million euros.
6. Hamburg is the German home of some of the world’s top tech companies.
   New ventures in Hamburg join a list of some of the most recognized multinational tech companies. These include: Twitter (Altona), Dropbox (Gänsemarkt), Facebook (Gänsemarkt), Google (Gänsemarkt), Yelp (Rödingsmarkt), Microsoft (Bahrenfeld) and Snapchat.
7. A heart for online gaming.
   Hamburg is best known for its gaming industry, serving millions of users worldwide and attracting serious foreign investment. In 2003, Gamecity:Hamburg was launched with the aim of developing the city as an attractive location for the gaming industry. This initiative has helped to draw talent and companies to the city. A number of strong gaming companies are located here including: Innogame (Hammerbrook), Bigpoint (Gänsemarkt), Goodgames Studio (Bahrenfeld), Gamigo (Altona), DeepSilver FISHLABS (Rödingsmarkt). The strong gaming tradition has helped develop a vibrant independent games scene with strengths in both mobile, PC and VR gaming.
8. Legacy of early tech success.
   Hamburg is home to some of Germany’s earliest tech success stories. Proudly hailing from Hamburg, Qype and Xing were among Germany’s first internet companies. Today they are joined by popular dating site Parship and Kreditech in a vibrant and closely knit ecosystem.
9. High quality of life and connectivity.
   Hamburg is Germany’s 2nd largest city and the 6th largest city in the EU. The Economist ranked the city 10th most liveable in the world (3rd highest in Europe). The city’s inhabitants enjoy the seaside (ocean views are linked to better mental health), a beautiful new opera house, 2 football teams and Germany’s 5th busiest airport. Berlin men’s fashion portal Outfittery has chosen Hamburg Airport to showcase a concept store. The airport is easy to reach and serves a number of international destinations, with direct flights to New York, London, Paris and Stockholm. Public transport is excellent and has a handy up-to-date English website. Startup mytaxi offers ride hailing services. You can reach Berlin by train in under 2 hours.
10. Promising funding landscape.
    Hamburg has a vibrant local VC scen anchored by Hanse Ventures and Otto Group. Other local funders include Gruner+Jahr, Liquid Labs, Digital Pioneers, and BTG Hamburg. Startups in Hamburg have also been very successful in garnering funding from outside Germany notably Kreditech, which received investment from a number of international investors (most recently €110M funding round in May 2017). In 2016, Bigpoint Games was acquired for €80 million by Chinese investors.
11. Robot pizza delivery. Yes, really. The future is now. No tipping required.

What people are saying about Hamburg:

“Hamburg provides a high quality of living, there is plenty of talent from surrounding universities, other big media companies, some tech companies. Also the city provides an ideal infrastructure with a short way to the airport and the train station — within 90 to 120 minutes you can get to all the European banking and fintech hotspots. This and the small but friendly startup scene (while sometimes a bit overly hostile in Berlin) makes it a very enjoyable workplace.”  Sebastian Diemer, CEO of Kreditech in a 2015 interview with Pavel Curda.

“Hamburg is an amazing city — green, beautiful, tons to do, and our approach to development provides the work-life balance to enjoy it.” Shawn, Senior Producer of DarkOrbit Reloaded, Big Point Games.

While the city has worked hard to develop a diverse entrepreneurial ecosystem, the startup scene is comparably smaller when compared to those in Berlin and Munich. A larger share of events and meetups are in German, which may make it harder for international founders. Salaries and costs of living tend to be higher in Hamburg than in Berlin, and the smaller tech scene there contributes to a smaller talent pool. This makes Hamburg startups reliant on services such as the Business Immigration Service and the Hamburg Welcome Center to bring in talent from abroad. Despite these challenges, Hamburg’s political commitment to startups, strong corporate ties, exciting smart city solutions and high quality of life make it an ecosystem worth watching.

― Written by Natalie Novick.

Natalie has recently joined the Startup Heatmap Europe research team. Her research examines entrepreneurial culture across Europe’s up-and-coming startup hotspots and currently finishes her PhD from the University of California San Diego on this topic. She has recently returned from Hamburg to explore the local startup scene. In this piece, she shares some reasons why Hamburg is worth a look.