However, unlike its competitors, the German VC market is much smaller, making the ecosystem ripe for international investors to scout new talent. According to KFW’s 2020 Venture Capital study, out of the deals exceeding $50 million funding rounds, half are led entirely by foreign VCs, while 45% are made up of a mix of foreign and domestic investors. Another advantage is that the German startup market is very diverse. Rather than being concentrated in one major city, a number of tech hubs have developed across the country thanks to the government’s Digital Hub Initiative.
If this sounds a little overwhelming, not to worry. We spoke with Digital Hub Initiative’s experts to find out what VCs need to know about the latest tech trends hitting the country’s startup ecosystem.
Security in the age of IoT
IoT is one of the vital building blocks of modern technology, and it has already made our homes and workplaces smarter and more efficient. Germany has been in the midst of its Industry 4.0 shift for almost a decade as the country trends towards digitization of its multiple sectors. However, while IoT will make our homes and workplaces smarter, it will also come with new security challenges. The more connected our lives are, with everything from our Google Home to autonomous cars being online, the more vulnerable we are to cyberattacks. There are several startups in Germany dedicated to improving IoT security. For example, Bitahoy is focused on helping smart home owners keep their IoT devices secure and free from data leakages. Of course, it’s companies that have been the biggest targets for cybersecurity breaches. Comuny is a startup facilitating greater workplace IoT security by providing more effective registration and login via mobile apps.
Data privacy is key
Data privacy has been an important concern across the EU since GDPR but Germany in particular has been a key player in upholding this right across the bloc and internationally. Just recently, the country’s data protection commissioner called on government bodies to remove their Facebook pages, arguing that the tech giant isn’t complying with privacy regulations. Whether or not this stand down against one of the biggest names in tech comes to light, it’s certain that Germany’s tech scene is a leader in the drive towards greater data privacy. Complero is one German startup that’s helping businesses big and small keep customer data up to date, make data management processes transparent and, most importantly, ensure compliance with GDPR.
Smart, sustainable mobility
As the home of BMW, Audi, Mercedes-Benz, Porsche, and Volkswagen, to name a few, Germany has always been known for its automotive industry. But with the threat of climate change growing and new innovations in the fields of electric, hydropower, and solar energy, the country is quickly adopting new solutions that will aid the industry’s transformation. Germany’s startups are now leading the transition to the new age of smart, connected, and sustainable mobility. With the rise of the EV market, car dealers, charging point operators, and electricity vendors need new infrastructure and tools to streamline their business. DeftPower offers their customers an easy way to build cloud based, branded charging apps. But mobility isn’t just about automobiles, it’s also about the mobility of commerce and delivery services. Glocally is a startup dedicated to helping stores ship goods to their local customers with sustainable same-day delivery options.
Danke schön Mr. Roboto
The robotics industry in Germany has been booming over the last decade. Despite experiencing a slight dip in 2020 due to the pandemic, according to a forecast by the VDMA Robotics + Automation Association, Germany will generate sales of €13.4 billion in 2021 – an increase of 11 percent. Whether it be for industrial use in the country’s hi-tech logistics industry or commercial with the rise of its self-driving cars market, robotics remain a major part of the country’s tech industry. PowerOn Smart Elastic is a startup that aims to revolutionize the material of the robotics industry, figuratively and literally. Robotics of the future will need to be able to interact with people in a way that cold metal and plastics won’t be able to. PowerOn’s vision is to create robots that are not only soft to the touch, but are capable of giving a soft touch when dealing with humans or products, whether it’s softer prosthetic limbs or agritech robots that can handle fruit without bruising it.
MedTech innovation is growing
Germany has one of the largest markets for medical technology in the world, and the nation has a history of producing some of the biggest medtech device manufacturers in Europe. Now a new generation of minds is using cutting edge tech to provide new solutions set to transform the medical industry. For example, one of the treatments for cardiac arrest is medical hypothermia, which can help prevent permanent brain damage. But how does anyone provide medical hypothermia? German startup Medical Cooling provides exactly what the name suggests: A machine that creates portable medical cooling for therapeutic purposes. This innovation can help regulate the body temperatures of patients in critical condition, keeping their bodies from experiencing permanent damage.
Join the Digital Hub Initiative at TNW2021
There’s no doubt that Germany’s startup scene is teeming with innovative new startups ready to make their mark. Now you have the chance to connect with the startups mentioned here and more in person at Digital Hub Initiative’s TNW2021 startup pavilion from September 30 – October 1.
