Another key driver is the marked increase in foreign direct investment (FDI) into Germany over the past year: investment from the U.S. and Asia alone was EUR 1.8 billion in 2018 compared to EUR 0.4 billion in 2016. Insight, Sequoia, Goldman Sachs, and Rakuten are some of 2018’s highest profile investors, while South Africa’s Naspers made a significant single investment. So why does Germany remain attractive when intercontinental FDI is slowing down around the world – a mega-trend which has been labelled “Slowbalization?” Achim Hartig, head of investor recruitment at Germany Trade & Invest, has some ideas: “The stability of the political system is a cornerstone of the E.U. as a free market and facilitates trade and investment worldwide,” he says. “The German government supports SMEs developing innovative products, services, technologies and processes. Start-ups in Germany are cooperating with traditional companies. As a result, we are attracting more international start-ups.”
Europe strong on sustainability
Dealroom has identified FinTech, mobility, and deep tech as Germany’s principle investment growth areas, but the Digital Hub Initiative is fostering innovation in a number of specialist fields. The Deutscher Startup Monitor 2018 found that, besides digitalization, sustainability and ethical business practices were high on the priority list for start-ups.
Florian Nöll, chairman of the board of the German Startups Association, believes European and especially German start-ups have an opportunity to change the game: “There are many topics out there that the big [U.S.] tech companies haven’t addressed sufficiently like transparency and sustainability. This is a big opportunity for European start-ups, many of which solve current and future problems, and we need to spread the word. If we can do that, the future tech giants will be based in Paris, Warsaw, Berlin and Lisbon.”