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Mannheim Startup Monitor

Mannheim Startup Monitor DSM

When talking about start-up ecosystems in Germany, the focus is usually on towns like Berlin or Munich. But it is not only in these two international hotspots that an active start-up scene has developed in recent years, but also in many other regions of the country: Mannheim stands out here as one of the strongest locations in Germany for start-ups in relation to the number of inhabitants.

The details of the regional start-up culture have now been analysed in the regional evaluation of the German Startup Monitor 2020 for Mannheim. The town scores above average in almost all areas. The high start-up activity was particularly striking: Mannheim occupies a top position nationwide in terms of start-up activity per inhabitant. Satisfaction with the ecosystem and local conditions is also very pronounced. The start-ups based in Mannheim appreciate their location and rate it significantly better than start-ups in other regions. No other larger location was rated better on average by the founders in the survey for the German Startup Monitor. In addition to the vital ecosystem, institutional reasons also play a role: with the University of Mannheim, the city is home to one of the top German start-up universities, and the strong B2B scene among the local start-ups benefits from the large number of established companies in the region. Still there is a need for improvement, above all in access to capital. Deficits can be found in this area, so that larger investments and high employee numbers are currently still a rarity.

The high proportion of early-stage start-ups is not necessarily negative, but has a downside: serial start-ups are rather the exception. This need not be detrimental to the dynamics of the ecosystem. However, a high proportion of serial start-ups is considered an indicator of a developed ecosystem. Series start-ups are a sign of the attractiveness of the location, create international networks and, as potential business angels, in turn strengthen the financing landscape - prominent examples are the start-ups funded by Paypal in Silicon Valley, which include Tesla and LinkedIn.

This can lead to a tendency to move to locations with better financing conditions, such as Munich, Frankfurt or Berlin, as access to all forms of financing is not considered fully developed in Mannheim. Still founders assess their local financing possibilities as rather positive. Nevertheless, business angels and venture capital funds in particular are still used relatively rare compared to the national average. Financing growth locally thus remains a challenge. Business angels and venture capital providers are important building blocks for growth - this is shown by the example of Berlin or Munich, where these opportunities are more likely to exist, and more start-ups are consequently in the growth stage.

Conversely, Mannheim has a high proportion of early-stage start-ups, which indicates an ecosystem in transition. The number of start-ups is also very high in absolute figures. After Berlin, Munich and Hamburg, Mannheim ranks fourth among the cities with the most start-ups. Calculated per 100,000 inhabitants, this puts the city well ahead of many other start-up locations. It also stands out in a regional comparison: together with Karlsruhe and Stuttgart, it is one of the top start-up locations in Baden-Württemberg.

Mannheim as a location can score particularly well with two factors: The opportunity for high-turnover and profitable B2B business is particularly available in Mannheim. Thus, the start-ups here can benefit from the numerous established companies in the Rhine-Neckar region. At 67.8%, more start-ups than at any other location rate these cooperation opportunities as (very) good. In addition, the higher education landscape is considered an important location factor by many founders. 95% of founders rate the proximity of the university as above average. This is an absolute peak value, comparable only with large university cities and TU locations such as Munich (92.6 %) or Aachen (94.3 %). Three out of ten (29.1 %) of the founders studied in Mannheim obtained their degree at the University of Mannheim.

And there is another positive piece of news to report: Start-ups are defying the corona crisis. 84.7 % of them plan to hire new staff in Mannheim next year. This means that the start-ups are dealing with the global downturn suprising well and can become a real job engine. There is no lack of prominent role models: Snapchat, Uber and Instagram were all founded during the last major crisis.

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