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SHM2019: Startup Highways Part II

With two Mediterranean hubs (Lisbon and Barcelona) in the Circle Line, we see a very strong integration of the Portuguese and Spanish startup scenes in the core European network. It is an additional strength that Barcelona builds ties with other Southern European hubs like Madrid and Milan. Lisbon is not directly connected with Milan, but has a strong one way connection to Madrid (3%) at least.

The Southern Connection

From the map above it is easy to see that Barcelona is the central interchange between the Southern hubs. Overall, 34% of all founders in Europe could imagine to join the Southern Connector and startup their company here. The strongest interest comes, of course, from the Mediterranean (70%), followed by the Nordics and Baltics (33%) and the UK & Ireland (28%). While only 16% of the founders in Benelux find the Southern Connector interesting.

In terms of investments raised, this network is however not living up to its full potential yet. Only 1.8bn € were invested in these hubs in 2018, which is a 7.82% share of the funds going to the top 50 hubs in Europe.

Madrid and Milan Connect To The Industry

Rank 2019: 12th
(+4)
Marketshare: 5.43% founders (+1.69%)
Reach: 10 countries
Foreign-Born Founders: 30-50%
Strongest Vertical: Big Data (8.31%)

2018 Investments: 343 mn €
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Reputation:

Rank 2019: 8th
(+/-0)
Marketshare: 7.27% founders (+1.32%)
Reach: 12 countries
Foreign-Born Founders: 0-30%
Strongest Vertical: eCommerce (7.50%)

2018 Investments: 257 mn €
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Reputation:

While all Southern hubs have a relatively high rating for value for money as well as availability for talent, Madrid and Milan bring something that Barcelona and Lisbon do not have: Industry Connections. With an endorsement rate of 72% and 80%, both Milan and Madrid seem to be recognized for strong corporate startup relations.

Again, we see a good complementarity within a sub-network, which might explain why founders build connections across these locations.

The German Interstate

Besides Berlin, the most prominent German speaking startup hubs are Munich (Rank- 7th), Vienna (13th) and Zurich (14th). Together they reach almost 17% of all founders in Europe. If we include Berlin, this number would rise to 46%. The strongest reach outside their own region is in the CEE (21% of marketshare) and the Mediterranean (11%), while only 2% of the UK founders consider the German Interstate (without Berlin). In addition to Berlin‘s 2.2bn € investments, startups on the German Interstate raised 1.6bn € in 2018, showing the strong stance of the three hubs around the Alps.

The Germans are scoring in High-Tech

The strength of the network definitely lies in its specialization on High-Tech: Health & BioTech as well as Big Data startups have a particular faible for Munich and Zurich, while Vienna and Zurich are top ranked for FinTech.

 MunichZurichVienna
Health & BioTech7th (13%)8th (11%)12th (7%)
FinTech13th (5%)5th (15%)10th (8%)
Big Data7th (12%)5th (13%)15th (5%)

Rank 2019: 7th
(+/-0)
Marketshare: 8.32% founders (+2.17%)
Reach: 17 countries
Foreign-Born Founders: 30-50%
Strongest Vertical: Health & BioTech (12.79%)

2018 Investments: 409 mn €
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Reputation:

Rank 2019: 14th
(-5)
Marketshare: 4.77% founders (-1.13%)
Reach: 15 countries
Foreign-Born Founders: 70-80%
Strongest Vertical: FinTech (15.02%)

2018 Investments: 412 mn €
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Reputation:

Rank 2019: 13th
(+1)
Marketshare: 5.24% founders (+0.8%)
Reach: 16 countries
Foreign-Born Founders: 30-50%
Strongest Vertical: FinTech (8.20%)

2018 Investments: 822 mn €
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Reputation:

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