Deep Ecosystems, a Germany-based accelerator for ecosystem projects, have released its 7th edition of the Startup Heatmap Report, ranking Europe’s top 50 most popular startup hubs in the continent.
The ranking is based on a survey that polled more than 24,000 pre-selected founders equally distributed over Europe to understand their sentiments on local startup landscapes. Results were compiled in a report, giving a detailed view of each European tech hubs in the region and featuring insights about investments, internationalization patterns and founder sentiments.
This year again, Berlin and London ranked at the top of the list, selected by European founders as the best cities in the continent to launch a startup. These two locations were recognized for their business-friendly regulations, easy access to funding, and dynamic startup ecosystems. They were also named among Europe’s top five fintech hubs.
Berlin: Europe’s top tech hub
Berlin received a solid 37% of founders’ vote, indicating that more than every third founder in Europe could imagine starting their company in the German capital. Respondents highlighted the city’s thriving startup community, strong support network of academic institutions, large corporates, and innovative communities, as well as growing availability of capital.
Not only is Berlin founders’ preferred location in Europe to launch a startup, it’s also a major fintech hub in the region that’s ranked by Deep Ecosystems as one of Europe’s top five fintech ecosystems. Similarly, the Global Fintech Index 2021 listed the German capital at first place in the European Union (EU) last year, ahead of Amsterdam, Stockholm and Frankfurt.
The Berlin startup map shows over 900 fintech companies in the city, among which unicorn startups N26, a digital bank worth US$9.25 billion, Trade Republic, a neobroker valued US$5.36 billion, and Wefox, an insurtech startup worth US$4.5 billion, data from CB Insights show. N26, Trade Republic and Wefox are also Berlin’s most valuable private companies, showcasing the city’s vibrant fintech scene.
This year, fintech funding in the city has so far remained strong, with large rounds being reported in H1 2022. These include Wefox’s US$400 million Series D, Trade Republic’s EUR 250 million Series C extension, Payhawk’s US$100 million Series B, and Vivid Money’s EUR 100 million Series C.
London: a fintech powerhouse
After Berlin, London took the second position in the ranking, selected by 33% of the founders polled by Deep Ecosystems as one of the top two places they could imagine starting a tech company in. Respondents pointed out London’s business-friendly regulations, industry networks and easy access to funding as the city’s biggest strengths.
Like Berlin, London was also recognized for being one of Europe’s top five fintech ecosystems, acknowledged by the community for its culture of creativity, supportive regulators, and a pipeline of diverse digital and financial talent.
Data from City of London Corporation, Findexable and Mambu, show that London hosts a massive number of fintech companies, with 1,230 firms headquartered in the city. The figure means that nearly half of the UK’s fintech companies (over 2,500) are based in the capital city.
Further demonstrating London’s fintech leadership, data from CB Insights show that of the 36 tech unicorn startups headquartered in the city, 24 are fintech companies, among which Checkout.com (worth US$40 billion), Revolut (US$33 billion), Blockchain.com (US$14 billion), Rapyd (US$8.75 billion) and SumUp (US$8.5 billion).
In 2022, investors continued to remain bullish on the local fintech industry, with rapidly growing startups closing massive rounds of funding. Checkout.com, an international payment platform, raised US$1 billion in a Series D funding round, GoCardless, an account-to-account payments specialist, closed a US$312 million Series G, and PayFit, a payroll and human resources (HR) software provider, raised EUR 254 million in a Series E. Both GoCardless and PayFit reached unicorn status after closing their fundraising rounds.
Featured image credit: edited from Pexels
