Germany pitching Berlin as hub for internet start-ups

In the last few years, Berlin has been gaining a reputation as the epicentre of the European internet start-up scene, in part because its hip image and relatively low rents are attracting entrepreneurs and developers from around the world. It's a reputation the German government is actively encouraging.

City gaining reputation as 'Silicon Allee'

Edial Dekker of says Berlin is the perfect birthplace for his Internet start-up company. (Karen Pauls/CBC)

Nearly two dozen people are sipping coffee in a Berlin office at a weekend workshop held by Coffee Circle, a German company that sources, roasts and sells coffee online.

This kaffeeklatsch is not a business meeting, but a seminar organized by, a Berlin start-up that hopes to change the way people experience the cities they live in and travel to.

"We’re like a peer-to-peer marketplace – anyone can offer something, anyone can book something. If you’re a professional or want to show off your skill or knowledge, you can offer off-the-grid things to do," explains Edial Dekker, co-founder and CEO of

"We want to become the place where people go if they’re looking for really unique things to do, to replace Lonely Planet or Rough Guide."

In the last few years, Berlin has become known as "Silicon Allee," the epicentre of the European Internet start-up scene, in part because its hip reputation and relatively low cost of living are attracting entrepreneurs and developers from around the world. It’s a reputation the government is encouraging.

German Chancellor Angela Merkel and Economy Minister Philipp Rösler recently showed their support for the nascent industry by touring the Berlin offices of Wooga, an online game developer for smartphones and tablets. Wooga has become a poster child of the city's start-up community.

Industry leaders also point to the success of a company such as SoundCloud, a platform for musicians to exchange their compositions.

'We could do very much better'

At the CeBIT convention in Hamburg earlier this month, Merkel said a fully operational IT infrastructure is as important as water, electricity and gas, and a crucial factor in economic growth.

"We must always aim to be the best in the world. We are good in many areas, but in information and communication technology, there are a great many fields in which we could do very much better," Merkel told delegates at what is billed as the world’s leading high-tech event.

In Germany, it is estimated that 850,000 people work in IT, but there are 40,000 job vacancies, Merkel said, adding that the government is specifically promoting technical training and degree courses.

Rösler has said 9,000 new IT companies were founded in Germany last year, and 20 per cent of the growth in German productivity comes from the tech world.

CBC in Berlin

Karen Pauls is in Berlin to enhance CBC's European coverage at a time when the continent is struggling through one of the most unpredictable periods in recent history. Germany's prosperity is being closely watched as the ongoing fiscal crisis puts the European Union under great strain.

Pauls has covered national affairs in Canada for CBC Radio, and has been previously posted in London, U.K., and Washington, D.C. Follow her on Twitter @karenpaulscbc.

A study by the Fraunhofer Institute for Systems and Innovation Research found that in 2011, €926.1 million flowed from investment funds into so-called early-stage financing in German internet companies.

That pales by comparison to the United States, where investors pump the equivalent of €30 billion into start-ups every year.

In a ranking of the world’s top start-up ecosystems in 2012, analysts at the networking blog Start-Up Genome ranked Berlin at number 15.

"Berlin start-ups might consider relocating as the ecosystem is not mature enough in terms of capital, support infrastructure, and mindset," they wrote in a recent report.

In fact, there have been some high-profile flame-outs, such as the social network StudiVZ, which was worth €85 million a few years ago until it fell to its competitor, Facebook.

Still, for the young entrepreneurs at, Berlin is the only place to be right now. It’s where everything started in 2011, and where the most events are available – from street art walking tours and kite-boarding in an abandoned airport to a "cake walk" in one of the trendy neighborhoods.

"We’re trying to change the way people explore the world and their own cities," says Gidsy’s community manager, Katie Needs, who’s originally from Aurora, Ont.

"Canadians are really community-oriented people, so Gidsy is perfect for Toronto and smaller cities – just think of the thing you love to do most or can share with people, log into and create an activity people can book."

For "experience providers" such as Coffee Circle, takes care of logistics, such as booking and payment, Coffee Circle co-founder Moritz Waldstein says.

So far, all of his company’s events are booked through, although the business has grown so much, it will open its own roaster and workshop this summer.

"It’s a nice platform, because it connects an interesting array of people interested in new things," he says.