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3 Reasons Israeli Startups Should Collaborate with Berlin

While Silicon Valley has long been the world leader for high-tech start-ups, there has been a recent rise of other significant start-up ecosystems; Berlin in particular has become a hotspot, as it is full of venture capital looking for deal-flow and just a short flight away from Israel
People walk on a street in Berlin (illustrative photo credit: Doron Horowitz/Flash90)
People walk on a street in Berlin (illustrative photo credit: Doron Horowitz/Flash90)

After living in both Tel Aviv and San Francisco, it has become apparent that most Israeli entrepreneurs set their focus on collaborating with VCs, investors and talent located in Silicon Valley. Yet while Silicon Valley has long been the world leader for high-tech startups, there has been a recent rise of other significant startup ecosystems.

Berlin in particular has become a startup hotspot. This makes sense, as it’s been noted that Germany is the fourth-largest GDP in the world. Berlin is full of venture capital looking for deal-flow, which is great considering the city is just a short flight from Israel, the “Startup Nation.”

However, a gap still remains between the Berlin and Israeli startup ecosystems. In order to bring the two startup capitals closer, Dataconomy Media is hosting their next Data Natives conference in Tel Aviv on September 25th 2016. The first Data Natives conference took place in Berlin last year and attracted almost 500 attendees and 40 speakers interested in emerging data-driven technologies.

Now, Dataconomy is looking towards Israel to further enrich the tech scene and build strong partnerships with the German Government, prominent incubators and accelerators.

Here are 3 reasons why Israeli startups should seek collaboration opportunities with Berlin:

 #1. Berlin outranks London in startup investment:

Believe it or not, Berlin was recently ranked as the new startup capital of Europe. According to a recent study conducted by Ernst & Young, €1.4 billion in funding went to startups in Berlin. As a result, Germany took first place for startup funding against its European competitors.

Berlin also offers a plethora of programs, incubators and accelerators that are seeking Israeli startups. For example, Startbootcamp Barcelona is the largest accelerator in Europe and one of the top 3 largest in the world. Leaders from Startupbootcamp Barcelona will be present during Data Natives Tel Aviv to seek out Israeli startups to join their program.

Startup Expert at European Innovation Hub and Mentor for Startupbootcamp Digital Health Berlin, Maren Lesche, will serve as a judge during Data Natives Tel Aviv’s “Startup Battle”. During an interview with Dataconomy, Maren mentioned,

“Shortly after DataNatives Tel Aviv, we will start the first of ten Open Calls. Within this call, SMEs and startups in eHealth, IoT, Big Data and logistics can apply for financial support of up to €125,000 per project. Just in this one call we will invest €850,000 to strengthen IoT technologies made in Europe and Israel.”

In addition to Startupbootcamp Barcelona and European Innovation Hub, The Axel Springer Plug and Play Accelerator in Berlin also has a large focus on Israeli startups. In fact, five of the eight startups recently accepted to their program came from Israel. All of the Israeli companies accepted decided to stay in Berlin, as they see huge potential in Germany.

#2. Berlin allows Israeli startups to gain a presence in Europe

Berlin is one of Europe’s most cosmopolitan cities and holds huge potential for Israeli startups looking to build a presence in the European market. Plus, the competition between startups in Germany is much less in comparison to those in America.

“Everyone in Germany sees Israel as a start-up nation, especially in the fields of security and IT. It may be stereotypical, but true,” explains Jörg Rheinboldt who heads the Axel Springer Accelerator. “For the Israelis, launching in Germany is proof for future investors that their start-up can make it also outside of the local market.”

Berlin is also hungry for new technology and Israeli startups are capable of bringing just that to Germany. Mathias Döpfner, the chief executive officer of Axel Springer, says, “Berlin is the region’s best shot at developing tech companies that can better compete on a global level.”

Berlin not only offers Israeli startups an opportunity to build their presence in Europe, but the country is also much more affordable than Tel Aviv. Berlin is also the best place to hire people for startups due to German labor laws. 100,000 new jobs are expected to be created in the digital industry in Berlin by 2020 and new talent is greatly needed.

#3. The Berlin and Tel Aviv startup ecosystems are similar and can be strengthened together

The startup ecosystems and venture capital scene are similar in Berlin and Tel Aviv. Both emerged about 15 years ago and are equally mature in development, with lots of very young startup founders.

While these ecosystems do have similarities, it only makes sense for the cities to join forces to create an even powerful startup culture. For instance, Tel Aviv startups are extremely advanced and are proving to solve some of the world’s greatest challenges.

For example, the Intelligence Unit 8200 is the largest in the Israeli Defense Forces (IDF) and exposes Israeli participants to some of the world’s most advanced technology. Several alumni of 8200 have gone on to create leading companies such as Waze, ICQ and Onavo.

While the understanding of technology is great in Israel, Berlin startups seek these leaders out to help head their startups and act as CTOs. This technical talent is greatly needed in Berlin and will allow the startup culture to grow there as more Israelis enter the scene.

This in mind, about one year ago Tel Aviv and Berlin signed an agreement in which co-working spaces will be exchanged and Israeli entrepreneurs will be given the chance to work in Berlin for free. The agreement is a collaboration between Berlin Partner and Tel Aviv Global in an effort to bring the similar startup ecosystems even closer.

“Tel Aviv and Berlin are both cities known for their startup friendly surroundings and infrastructure and we are sure that both cities can benefit from a startup cooperation,” said Andrea Joras, managing director of Berlin Partner. “The core of the collaboration between Berlin Partner and Tel Aviv Global is the exchange of co-working seats at public or private co-working hubs and landing support for internationalizing startups.”

Finding Success in Berlin

It should no longer be a secret that Israeli startups should look towards Berlin for success and vice versa. Both Tel Aviv and Berlin are young, vibrant cities filled with innovative entrepreneurs. Yet more awareness must be raised and new programs, initiatives and conferences, such as Data Natives Tel Aviv, must be created to bridge the gap between these two cities (Enter Dataconomy’s raffle to win a free ticket to Data Natives Tel Aviv 2016!).

About the Author
Rachel made Aliyah at the age of 24. She moved to Tel Aviv from Dallas, Texas by herself, after falling in love with the country on a birthright trip. Rachel currently lives in San Francisco where she works as a content marketing consultant and a blogger for The Huffington Post. Follow Rachel on Twitter, LinkedIn or Facebook to stay up to date with her most recent blog posts and articles.
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