5 Reasons Why Berlin is Europe’s Ad Tech Capital

Over the past 10 years, Berlin has developed into Europe’s leading technology cluster, with a strong competency in ad tech and programmatic marketing. It’s said a new startup is founded every 20 minutes in Berlin¹, and the city’s tech industry is set to produce a whopping 100,000 new jobs by 2020². Furthermore, Berlin tech companies raised over $980 million³ in venture capital funding in the first quarter of 2015—more than any other European city.

“Berlin benefits from an aura around its reputation as a creative, attractive, ‘born-again’ city after the fall of the Berlin Wall,” says Tim Koschella from his office on Rosenstraße, in the heart of Berlin.

Koschella is the founder of AppLift, a comprehensive programmatic media buying platform launched in Berlin several years ago.

“In the last few years, and in mobile especially, Berlin has managed to develop a healthy ad tech ecosystem,” says Koschella. “We’ve seen the foundation and development of many advertising and analytics companies, covering the entire value chain in the market, all the way from demand to supply.”

As a result of this critical mass, Koschella says, ad tech companies from all over the world are starting to open their own European headquarters in Berlin in order to benefit from the ecosystem.

Why has Berlin emerged as Europe’s ad tech capital?

Much of Berlin’s identity as an ad tech and mobile hub is a legacy of so-called “startup factory” HitFox Group. Using an accelerator or incubator model, HitFox Group focuses on ad tech and has launched or acquired companies such as AppLift, ad2games, Datamonk, and more. This ad tech DNA has helped spawn dozens of other ad tech startups in Berlin. There is a lot of talent and expertise in the ad tech space, plus plenty of support for high growth companies. This combination has led companies that are not originally from Berlin, such as TUNE, to open their European headquarters in Berlin in order to benefit from the ecosystem. TUNE’s enterprise SaaS technologies help companies such as AppLift build their own proprietary software.

Andreas Bodczek, CEO of Fyber—a leading mobile advertising technology company headquartered in Berlin and with an office in San Francisco—predicts that Berlin will continue to develop as an attractive hub for entrepreneurs.

“While HitFox, Rocket Internet, and other incubators provided an initial strong foundation for tech to prosper, today’s new crop of Berlin start-ups is raising the bar in designing sustainable businesses that are ready to compete on global scale and stand the test of time,” Bodczek said.

Here are five reasons why Berlin has become such an ad tech hub:

1. Berlin has plenty of affordable space to grow a startup

Since the fall of the Berlin Wall and German reunification 25 years ago, Berlin has long been known for its cheap rents and livable neighborhoods—prime ingredients for any successful startup culture to develop. Unlike pricey Silicon Valley, it’s cheaper, easier, and fundamentally less risky to launch a tech company in Berlin⁴.

2. Berlin’s tech scene is attractive to young innovators

With a cost of living still much lower than London, Paris, or other European cities, Berlin tends to attract young, dynamic, free-thinking innovators eager to work for innovative tech startups. The city’s thriving tech scene also offers plenty of choice in case a startup goes under or people want to advance their career at a different company that offers more opportunities for growth. In many ways Berlin is the perfect place to build a career.

3. Berlin makes it easy to attract global talent

While Berlin’s vibrant, growing cluster of tech companies makes the city attractive for global talent, Germany’s relative openness to immigration is another attractive reason to settle in the capital city. The process of applying for a working visa is relatively straightforward if you’re familiar with it and thanks to the influx of tech workers to Berlin, many startups know what to do to land the talent they need to grow their business. On top of that, German-founded companies in Berlin have started to adopt English as their primary working language⁵, thereby attracting further international talent.

4. Berlin’s startup scene is luring even bigger players

Berlin’s energetic startup scene is also attracting large companies including Deutsche Bank, Deutsche Telekom AG, and Cisco Systems Inc. These tech giants are coming to the city to take advantage of a workforce skilled at e-commerce, digitalization, and 3D printing. The larger companies are also helping raise the profile of Berlin’s tech sector on the global stage. Not only does this mean there is a steady flow of expertise and funding coming to the capital, but  Berlin-based companies also understand and can therefore compete in virtually any market around the world.

5. Berlin is a hub of creativity

The city is home to a compelling arts scene that thrives due to Berlin’s cultural critical mass. Adding creators, makers, and visionaries to the technology mix is transforming Berlin, and ad tech is one result of the transformation.

These five factors have all contributed to cementing Berlin as a hub of innovation for startups, ad networks, and performance marketers.

Koschella confirms this sentiment.

“There have already been interesting ad tech exits in Berlin, the biggest ones being Sociomantic, Zanox, and Fyber,” he says. “These exits have generated a community of angels and experts willing to invest in and support new adtech startups.”

Bodczek of Fyber agrees, “Many German entrepreneurs who’ve already built successful companies are now angel investors helping jumpstart a new generation of startups and foster a culture of ideas exchange, mentorship, and continuous tech innovation.”

All of this puts Berlin in a good position to become the European ad tech capital.

Photo: Sean Pavone/Shutterstock
Sources

1. One born every 20 minutes – Berlin is the city of startups
2. McKinsey study: Berlin can become Europe’s leading startup hub
   10 Reasons Berlin’s startup scene rocks
3. Berlin startup expansion turns death strip into economic hub
4. Berlin startup scene and Germany keeps talent busy
5. A growing number of firms worldwide are adopting English as their official language

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