Giving Startups a Hand Up

 From disruptive technologies to game-changing gadgets, more and more startups from around the world are choosing to collaborate with well-established German companies. What makes them so alluring?

July, 2018

Imagine a small gadget that turns every car into a moving WiFi hotspot. This was Jay Giraud’s vision when he founded Mojio in 2012 in Silicon Valley. But when the software and hardware had been developed, the venture ran aground. In order to make the leap from the research laboratory to the streets, the Californian entrepreneur realized he needed an industrial partner with a sales network and deep pockets. Several companies expressed an interest in a collaboration, but in the end Giraud went for the German telecommunications giant Deutsche Telekom.

The fact that a volatile startup might be looking for a strong and stable partnership is not exactly news. But Giraud’s decision is symptomatic of a wider movement: foreign startups are flocking to work with blue chip German corporations. For Kevin Heiden­reich from the German Chamber of Industry and Commerce (DIHK), the reason is clear: “Germany is home to many well-established and internationally successful companies,” he says. No other country exported so many goods abroad in the past year and the sales networks of German companies spread across the globe.

Gregor Schlosser, the man behind AHK Israel’s initiative BETATEC, which helps German and Israeli startups and companies collaborate and thrive together in the field of ICT. © Jonas Opperskalski/laif

German-Israeli co-operation

So on the one hand startups can gain a foothold in the German market, but they can also expand internationally. Charme Rykower of the German-Israeli Chamber of Commerce and Industry (AHK) points out that “many Israeli startups are developing brilliant technologies, but are failing to implement them worldwide. Seen in this way, cooperation with a German company offers a great opportunity.” The AHK has set up an initiative called BETATEC in Tel Aviv to enhance and further develop collaboration between the two countries in the ICT fields.

The benefits of such a cooperation are not one-sided. A startup will approach a larger, established company with a fresh perspective on an old problem. They often bring a lot of technical know-how with them and find unconventional solutions that can be put to immediate use. Through the association, the host company saves thousands of euros in R&D and can even benefit from the sale once the product has reached market maturity. For Mojio and Deutsche Telekom, the cooperation has proven to be a win-win situation; the “little guy” gained access to Deutsche Telekom’s vast telecommunications and the worldwide distribution networks, while the “big guy” acquired the right to commercialize the product worldwide. And since November 2017, customers have been able to buy Mojio adapters in Deutsche Telekom shops.