Lena Gaede

Promising tech startup hubs worldwide: Stuttgart’s startup scene on the fast track! Gain insights into its strengths, weaknesses and special powers

What comes to your mind when hearing “Stuttgart”? Let’s say, other than CODE_n’s home base, do you think of it as a booming scene for startups? No? Well, you might as well reconsider this since Stuttgart is becoming more and more of an insider tip for starting businesses. Yes, you heard right. This German city is capable of so much more than Maultaschen and Spätzle! Today we discover the strengths, weaknesses and special powers of Stuttgart as a tech startup hub!

What are Stuttgart’s biggest strengths from which startups can benefit?

Tech startup hub Stuttgart – strength #1: startup campuses & associations

Within the last couple of years, Stuttgart has been extending its range of supporting facilities and has thus created a startup friendly environment. With institutions like CODE_n SPACES, Startup Campus Stuttgart, or Startup Stuttgart, entrepreneurs get an innovative and inspiring assistance that allows them to work on their visions and turn them into reality in a location designed just for their individual needs.

Tech startup hub Stuttgart – strength #2: industry

It’s no secret that Stuttgart owns a distinctive industrial scene. With leading corporations like Daimler, Robert Bosch, Porsche or Festo, the city is one of the most valuables industrial assets in Germany. Not only companies from the automotive sector but also a lot of hidden champions in various industries can be found in and around Stuttgart. Always with the finger on the pulse of time, the region can be considered as a perfect environment for startups looking for a great company to partner up with. This is an important fact, especially for B2B startups, since more than half of all startups in Stuttgart only have B2B customers.

Our CODE_n SPACES Resident aucobo can talk about some positive experiences when it comes to founding an industry-focused startup in Stuttgart. Michael Reutter, Co-Founder & CEO of aucobo says: “There is no better place to start your B2B industry startup than Stuttgart. The mixture of high class companies that are interested in new ideas and startups paired with universities and research institutes like the University of Stuttgart and Fraunhofer, as well as networks like bwcon and CODE_n helped us develop our product close to the demands of our customers. Our first customers were just a stone’s throw from us – perfect to develop our product from an MVP to a market-ready product.”

Tech startup hub Stuttgart – strength #3: convincing facts and figures

With its central geographical situation, Stuttgart is deemed to be Europe’s hub for business matters. In 2016, 19.7 % of startups in Stuttgart were able to finance themselves only from their own savings. But the number of startups financed by venture capital is also increasing. A low unemployment rate with the result of a great spending power completes the picture.

 

What are the weaknesses of Stuttgart that could be a downside for startups?

Tech startup hub Stuttgart – weakness #1: rent index

With exorbitant rental prices, Stuttgart comes in second in the race of Germany’s most expensive cities. With an average price of 15,54 € per square meter, renting a place in the heart of the city comes close to a privilege. So, be prepared to dig deep into your pockets.

 Tech startup hub Stuttgart – weakness #2: industry focus

As already mentioned above, Stuttgart is a stronghold for the industrial scene. But one man’s joy is another man’s sorrow: while this is definitely a benefit for B2B startups, these conditions make it a little harder for B2C startups to thrive in this city. Other than in Berlin, for example, where the focus is clearly on B2C.

What are Stuttgart’s special powers?

Tech startup hub Stuttgart – specialty #1: attractive frame conditions

In the first quarter of 2016, the fDi Magazine presented the ranking ‘European cities and regions of the future 2016/2017’. The excellent result confirmed Stuttgart’s liveliness, attractiveness and economic potential. The Swabian city is ranked fourth among the top 10 large European cities, only behind Frankfurt, Munich and Düsseldorf.

Worth mentioning are also the good Universities in the region. They offer a wide range of programs and are known for their excellent education.

Our former CODE_n SPACES Resident monikit also benefits from a supporting environment. Kevin Klett, Founder of monikit, explains why he is so fond of this city: “As an early stage startup in the medical technology industry, it’s incredibly valuable to develop strategic partnerships in order to overcome business challenges on multiple fronts and help you experiment with different technologies. In this regard, we’re glad to be based in Stuttgart: the strong economy, the renowned Universities and Institutes as well as the extensive networking programs make it easy for startups to get in touch with new potential stakeholders. Stuttgart felt sort of a big incubator for us right from the start. Thanks to this, we’re working together closely i.e. with the well-respected University Hospital of Tübingen and are getting valuable support in terms of research and product development.”

 Tech startup hub Stuttgart – specialty #2: research and development

Stuttgart is Europe’s excellent center for research and development. Every day, companies invest € 13 million in research and development in the region − more than anywhere else in Germany. Considering that, Stuttgart runs rings around startup pilot Berlin, don’t you think?

If you now think of Stuttgart as the perfect location for your startup, you should have a look at our CODE_n SPACES, the innovation campus in Stuttgart per se. We keep you up to date with news of our residents and SPACES here.

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