A gigantic mechanical robot animal spits fire while pushing its way through the crowd in the post-apocalyptic world of Cologne’s “Odonien” – an old junkyard site turned art and exhibition space. We are at the PIRATE Summit – one of the most remarkable celebrations Europe’s tech scene has to offer: 1,200 hand-picked invite-only guests gather here to exchange on the newest trends in the industry, alongside leading European venture capitalists including Balderton Capital, Point Nine Capital, DN Capital, T-Ventures and key regional investors like Frank Thelen. This intimate event continues to receive praise from international tech media, with prominent mentions from Mike Butcher of TechCrunch and Robin Wauters of tech.eu.
The Startup Heatmap Europe team finds this keynote event to be the perfect starting point for exploring Cologne’s international appeal as a startup hub. In a groundbreaking collaboration between the City of Cologne and the team of the PIRATE Summit, we have produced a unique map, showing a plethora of actual connections between Cologne’s startup ecosystem and the world – be it investments, social media or startups coming to pitch at the Walk-the-plank competition. Furthermore, we interviewed dozens of guests at the PIRATE Summit 2017 to better understand how Cologne is perceived by outsiders as a hub for startups and how locals are able to leverage connections made through such an event.
Cologne’s international appeal as a startup hub
The research conducted at Startup Heatmap Europe shows a diverse situation for Cologne. While the PIRATE Summit receives praise from the most prestigious tech bloggers and experts, the city is not often cited by these very blogs more widely. An analysis of articles being published on Wired, TechCrunch, Mashable, TheNextWeb, tech.eu and startus.cc conducted in mid 2017, yields a sobering 28th position for Cologne in Europe, in between Luxembourg and Budapest. Consequently, Cologne finishes on the lower ranks of the annual Startup Heatmap Europe ranking based on founders’ choices for best startup hubs.
These results contrasts starkly with the strong connections the region’s stakeholders have been building. Significantly, Europe’s leading investment firm High-Tech Gruenderfonds (HTGF) is based nearby in Bonn, a city within Cologne’s Metropolitan area. We have collected 566 venture capital investment deals involving Cologne and its region within the last 5 years in the range of 30,000€ to 100mn€.
Mapping investments to and from Cologne
Putting these deals on a map shows the vast diversity of countries connected through investments with the Cologne/Bonn region: 119 of the recorded deals are inflows of investments to startups in the Cologne/Bonn region (including Aachen and Troisdorf) coming from 14 different countries. 446 investments go out of the region. High-Tech Gruenderfonds is responsible for 316 investments, and only 6% of these staying inside the region.
While HTGF is responsible for about ¾ of the investments going out of the region, we see a strong investor scene emerge in the region. This movement is led by Capnamic Ventures, based in Berlin and Cologne, with 27, and Deutsche Telekom with 12 recorded investments.
Less trackable, but admittedly similarly important to the local tech scene are Cologne’s notorious business angels, like Germany’s Shark Tank (“Hoehle der Loewen”) jury member Frank Thelen and eyeo (AdBlock Plus) investor Tim Schumacher. Their impact is mostly seen by their social media reach, which by far is ahead of most of Cologne’s tech influencers, as our analysis of the top 5 shows:
# of Followers Twitter
The language of these influencers gives an indication of their positioning and wider reach—influencers tweeting in English aim for a larger market, while those conducting their social media affairs exclusively in German aim to cultivate stronger connections to the German market.
Coming to Cologne for startups makes a lot of sense
We find there are a number of great arguments to be made for entrepreneurs to build connections to the Cologne startup scene. Startups connecting to Cologne not only take advantage of the massive investment power and smart capital available in the metropolitan region, but are also well situated in the larger metropolitan market. Cologne, in the heart of Germany’s Rhine-Ruhr metropolitan region is at the center of the country’s largest economic area. Not only does the Rhine-Ruhr region comprise Germany’s largest market, but the region is well connected to the nearby Dutch Randstand, Belgium and Luxembourg.
This attraction has encouraged many startups respond to the PIRATES’ call (“ARRRR”) as the PIRATE Summit Walk-the-Plank pitching competition shows: Over the last 3 years 190 startups from 48 diverse countries were selected to pitch in Cologne, while more than 1,300 founders came to attend the event. The most impressive finding about this is, how well spread the impact is with only a few origins sticking out with above the average numbers:
It is all about the people
The PIRATE Summit serves as a significant introduction point to the city for outsiders. During the 2017 event, we interviewed many participants to gauge their perception of the summit and its host city.
We found the atmosphere created by the event closely brings people together—the “no-VIPs” approach, cultivated guest list and shared dining spaces ensures all participants are able to network and connect in a way that is authentic and meaningful. It is these connections that bring participants to attend again and again—and to tell others about the event and to encourage them to attend. The warm feelings and strong connections the event provides provoke strong recall in the participants.
While the numerical count of visitors to the PIRATE Summit is just over 1,200 per yer — what may seem a small number compared to other events hosted by the city — the participants the event brings have an outside impact. Those who take part in the Summit hail from nearly 70 nationalities, from across Europe and beyond. However, the reach extends beyond the attendees themselves – both entrepreneurs and investors, are sharing their experiences with their community at home, through social media, including Facebook Live, Twitter, and Medium. As these individuals tend to be leaders in their hometown startup communities, positive experiences and meaningful connections made in Cologne can have a considerable influence.
Unfortunately, especially for international visitors to the PIRATE Summit, impressions of Cologne, and Cologne’s startup ecosystem remain unsophisticated and at times, inaccurate. There is an impression for those from outside of Germany to consider Cologne a “small” city, which does not reflect the city’s standing and importance in the larger German economic and cultural landscape. There is little understanding by the international participants of Cologne’s standing in the larger Rhine-Ruhr economic region, and the strong connections the city has with other metropolitan areas in the region, which make up Germany’s largest economic powerhouse.
Overall, the impressions that are strongest amongst participants are positive reflections of the culture of PIRATE Summit and the PIRATE.global team. The commitment to repeatedly hosting PIRATE Summit in Cologne speaks to the local startup community’s commitment and enthusiasm for the city, and its potential as a great startup city. From our impressions, Cologne has many of the elements that make a great startup city – a vibrant community ecosystem, committed city governance, strong local market and funding landscape—however, more work should be done to help bring these actors into alignment. Unlike many startup cities, the local governance is clearly committed to supporting the startup scene, by sponsoring the PIRATE Summit and hosting Cologne’s Startup SAFARI.This is a very promising commitment. We find that the PIRATE Summit provides an incredible asset for the city of Cologne, and this important venue helps to build warm impressions of the city and its startup community. Cultivating and building upon the impact of the PIRATE Summit can provide a considerable future return, in terms of business generation, startup activity, tourism and assessments of attractiveness. Leveraging this asset will be a key role for the city.