Top 5 cities to startup in Europe according to founders

Top 5 cities to startup in Europe according to founders

Written by Victoron

That location of a startup is crucial to its success is no longer news – just think of the tech titans of Silicon Valley. While local governments and cities aggressively parade their merits to attract startups, the perception of founders on which hub holds more opportunities for them will prevail on their choices.

Startup Heatmap Europe, the benchmark report on founder mobility in Europe asked founders, “Where would you startup if you were to start all over again?” Considering location factors: access to capital, talent, costs, personal network, proximity to target market and quality of ecosystem, entrepreneurs were asked to rate various European startup hubs. Unsurprisingly, London takes the lead, followed by Berlin. Barcelona and Paris are runners-up and Amsterdam is in the fifth position.

Founders’ Favourite Five

Interestingly, the top five startup cities received 50% of all votes in our study. London and Berlin attract more than 80% of founders’ votes – an unequivocal demonstration of their placement at the zenith of startup founders’ wish lists.

While London maintains its grip as the place-to-be for capital-intensive startups (87% of votes for access to capital), Berlin excels in quality of ecosystem (support, mentors, accelerators, etc.) as it attracts 88% of votes for this location factor. Barcelona, in third position is particularly appreciated abroad: 90% of its endorsements come from outside Spain. It is very popular with Western Europeans, where 1 in 4 founders would choose it as their next destination. However, with a potential Catalexit¸ its international appeal might be affected. Nevertheless, Barcelona stands out for ease and low costs of doing business (45%), a thriving ecosystem (51%) and access to talent (51%).

Top 10 startup hubs - Startup Heatmap 2017
Top 10 Startup Hubs as chosen by founders

The Parisian ecosystem, known for artificial intelligence, is gracefully appreciated by entrepreneurs who hail from France (41% of votes) and 30% of Western Europeans. While the French metropolis can do more to increase its international reach, it is worth noting that Paris jumps +19 ranks with respect to our last year’s survey. Perhaps the instability caused by the Bataclan shooting shortly before previous survey was carried out, negatively influenced founders’ opinions.

Ranked in the fifth position overall, Amsterdam leads the ranking of “Challenger hubs” in our study and is highly rated for abundance of quality talent (by 63% of founders), its ecosystem (57%) and access to capital (54%). “Challenger hubs” are hotspots that received a decent amount of votes from a diverse countries indicating their potential to fiercely contest London and Berlin, the “Super connectors”, who receive the most appreciation from majority of EU entrepreneurs.

Top 20 Startup Hubs according to founders - Startup Heatmap Europe 2017
Top 20 Startup Hubs according to founders
Zeroing down to type of startup, founders’ perceptions of best cities to startup in Europe do not vary much.

For internet startups (eCommerce, mobile applications, SaaS solutions), London, Berlin, Barcelona and Paris remain the top four most desired startup cities. In the fifth position, Dublin displaces Amsterdam which follows closely at rank number 7, after Stockholm.

Likewise, high tech startups (big data, hardware, IoT, biotech) rank their best startup hubs in the same order of the overall ranking. London disproportionately beats Berlin in this subgroup as 1 in 2 high tech company owners in our study would move there compared to 35% for the German capital. Again, this is directly related to access to capital – one of London’s biggest strengths. Remarkably, the UK-based investors participated in more venture capital deals than any European country in the last three years.

Perceptions Today, Reality Tomorrow

As aspiring entrepreneurs seek to build their companies and first timers become serial founders, it is very clear that the tendency is to gravitate towards booming startup hubs with established track records and success stories. However, this is only one side of the coin! Many startup cities are walking the road of specialization as our report reveals: Lausanne, for example, is ranked 55 overall but enters the list of top ten cities for high tech startups. We will expound on this in future blog posts. In the meanwhile, it is sufficient to say that while rankings are not absolute, founders’ views on the best cities to startup in Europe give a clearer picture on the startup landscape across the continent.

 

―By Victor Umeh

 

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  1. I like the article. I have never thought that Paris is the European city for AI.
    It would be great to see some startups that made those cities so attractive with a bit of explanation why it did so.
    Also, I would like to see some graphs for each city or each city compared with others so I can see in what categories they are close or not and what makes them a great opportunity.
    Also, this article is similar to yours but has more detailed stuff. Have a look, maybe it can complement your list.

    https://valuer.ai/blog/25-up-and-coming-startup-cities-to-watch/

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