Frankfurt Startup Ecosystem Report v1.2 - Color PDF

1
In partnership with:
Frankfurt Startup
Ecosystem Report
Driving Growth and Scaleups
with Universities and Corporations
Global partners:
Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Find us on:
2
About Startup Genome
Startup Genome works to increase the success rate of startups With our partners Global Entrepreneurship Network and Tech
and improve the performance of startup ecosystems globally. In Nation (formerly Tech City UK), and thanks to the generous support
a collaborative effort with hundreds of public and private organi- of the Kauffman Foundation, we deliver holistic, evidence-based
zations in more than 30 countries, we’ve built the world’s largest strategy frameworks for startup ecosystems across all phases of
primary research on startups, the Voice of the Entrepreneur, with development.
over 10,000 founders participating each year. This has allowed us
to develop rigorous models considered to be the new science of Thanks must go to all startups, partners, and members who have
startup ecosystem assessment. joined us in the mission to bring more regions into the global
startup revolution.
We advise leaders of innovation ministries, agencies, and
organizations supporting startups—bringing data-driv-
en insights, clarity, and focus to the actions needed to
produce more scale-ups, job creation, and economic
growth.
3
About Our Partners On This Report

TechQuartier Global Partners
TechQuartier (TQ) is the central plat- advance Frankfurt as a start-up hub. Not only has the university Global Entrepreneurship Network (GEN): Operates programs
form for the startup community in the partnered with TechQuartier and implemented several entrepre- in 170 countries that foster cross border collaboration between
Frankfurt Metropolitan Region, enriching the vibrant startup eco- neurship classes and summer courses, it has also helped count- entrepreneurs, investors, researchers, policymakers, and entrepreneurial
system with its unique community of more than 100 startups and less students, employees and alumni with its in-house incubator, support organizations to fuel healthier start and scale ecosystems
30 corporate partners and academic institutions. Offering over Goethe Unibator, an 18-month startup program.
3,200 square meters of flexible working space for startups, scale- CrunchBase: Everyday investors, journalists, founders,
ups, and the innovation teams of established companies, TQ offers and the global business community turn to CrunchBase for information on
an ideal environment for the development of new technologies, Yi Shi Foundation startups and the people behind them
services and business models. TechQuartier has been designated
by the Federal Ministry for Economic Affairs and Energy as Ger- Tech Nation (formerly Tech City UK): Empowers ambitious
Yi Shi is a young and modest entrepreneur from
many’s “FinTech-Hub.” tech entrepreneurs through growth programmes, digital en-
China who has achieved what others strive for
trepreneurship skills, a visa scheme for exceptional talent, and by champi-
their entire life: he is the founder and CEO of
oning the UK digital sector through data, stories and media campaigns
an extremely successful company: Avazu Holding. Yi Shi studied at
Goethe University Frankfurt Goethe University in Frankfurt and he is convinced that he owes
Orb Intelligence: Database of firmographics that provides
a lot of the know-how he needed to build his company to Goethe
company information on 50 million companies worldwide and
Goethe University Frankfurt was founded in University. That is why he set up the Yi Shi Innovation Foundation.
powerful data matching capabilities to marketing software vendors and B2B
1914 and has currently around 48,000 stu- He initiated the study in order to get more insights on how start-
marketing agencies
dents. The university received its current name ups in Germany can successfully transform into scaleups.
in 1932, in honour of the poet and writer Johann Wolfgang von
Dealroom: Helps corporations, investment firms and
Goethe, Frankfurt’s most famous “son”. The university works
governments to track innovative companies and identify strategic opportu-
to foster an entrepreneurial mindset among its students and
nities through its data-driven software

Find us on:

Contents
2 About Startup Genome 13 Frankfurt Ecosystem DNA 43 Acknowledgments and Partners
13 Economic and Ecosystem Overview
3 About Our Partners On 14 Ecosystem Overview 52 Methodology, Sources, and

This Report 16 Economic Overview References
18 Identifying Sub-Sector Strengths
19 Fintech
5 Executive Summary 22 AI, Big Data & Analytics
24 Cybersecurity
7 Global Overview and DNA 25 Frankfurt 360 Ecosystem

of Scaleups Assessment
26 A Ecosystem Lifecycle:
Frankfurt on the Brink of Rapid Ecosystem Growth
29 B Success Factor Analysis:
Strengths and Gaps in the Frankfurt Ecosystem
38 Key Findings and Policy Directions

Find us on:
5
Executive Summary
Frankfurt is emerging
The economic health of Frankfurt has long been based on inter- tutions. By offering entrepreneurship education and accelerator
national finance, transport and logistics, and research. Now, the programs, regional universities seek to connect Frankfurt’s strong
as a vibrant startup
region’s fast-growing startup ecosystem is establishing a strong talent base to the emerging startup ecosystem. Activation of
foundation for future growth, supported by the universities and talent is a key priority for an ecosystem like Frankfurt’s and is an
large corporations that currently anchor the economy. By lever- area of emphasis in the “Startup-Region Frankfurt Rhine-Main
ecosystem anchored aging these assets, regional leaders aim to triple the number of
startups in the region within five years—an important goal for a
Masterplan,” developed by TechQuartier, regional universities,
corporations, and the Hessian Ministry of Economics, Energy,
by its esteemed place like Frankfurt, which is in the Activation phase of the Eco-
system Lifecycle.
Transport, and Regional Development. The regional cooperation
on display in the Masterplan is another strength of the Frankfurt
finance industry and

startup ecosystem, which has one of the highest Sense of
Frankfurt’s multinational corporations operate several programs Community scores in our global assessment of Local Con-
to support startups and, increasingly, these companies are in- nectedness. The regional startup ecosystem may be small, but
proactive leadership. vesting more into early-stage companies. This has helped Frank-
furt achieve one of the fastest growth rates in early-stage
this already-strong culture among founders will underpin further
growth.
funding in the world in recent years. As a center of global
finance—home to the European Central Bank and several inter- Involvement of corporations and universities in the startup eco-
national banking headquarters—this corporate support has led system has helped strengthen other key ecosystem Success
to one of the world’s strongest clusters of Fintech startups. Frank- Factors which will help drive that growth. Thanks to Frankfurt’s
furt’s leading Fintech sub-sector has been catalyzed by financial status as a global financial hub and emerging center of Fintech
support (over half of venture capital investment in the region has startups—and several major international events—the region
gone into Fintech startups in the last five years) and the $800 draws visitors from around the world, including founders from
million acquisition of 360T in 2015 by Deutsche Börse. top startup ecosystems. Frankfurt founders do a remarkable job
establishing relationships with these founders while they’re in the
Corporate support of startups is complemented by the involve- region, building Global Connectedness through such local meet-
ment of Frankfurt’s high-quality universities and research insti- ings. Expanding this Global Connectedness will help drive growth.

Find us on:
6
To capitalize on its current advantages and assets, and stimulate In each of these priority areas, Frankfurt should leverage its cor-
faster economic growth, the top priority areas for the Frankfurt Frankfurt Has Potential to Quadruple Ecosystem Value porate and university assets and emerging sub-sector strengths in
startup ecosystem are: Fintech, Cybersecurity, and Artificial Intelligence & Big Data. While
corporations are active in supporting startups through acceler-
Frankfurt
●● Increase Startup Output
1.8
ator programs and strategic investments, they are also home to
●● The regional Masterplan has this right: Frankfurt needs at Global Median 4.1 thousands of employees with technical and business acumen who
least three times as many startups as it does now. Research would be a boon to startups. Many of them, no doubt, are from
Barcelona 6.4
clearly shows that, for an Activation phase ecosystem, other countries—these corporate employees are an important
growth in absolute size is imperative, particularly for the
Globalization
8.1 part of the regional talent base that needs to be activated and
Phase Average
creation of scaleup firms (see below). more connected to the startup ecosystem.
0 2 4 6 8 10
●● Even though the number of startups has risen in Frankfurt Ecosystem Value $B
Addressing these issues will not only increase the size and per-
in recent years, the region’s Startup Density is quite low,
formance of Frankfurt’s startup ecosystem but also lead to the
showing the potential to grow much larger.
creation of more scaleup firms. These companies, growing rapidly
●● Activate More Talent
●● While corporations have become active venture investors, to large size, generate disproportionate economic impact in every
●● This will help grow overall Startup Output and raise the and money has flowed into Fintech startups, Frankfurt still region. To provide guidance to Frankfurt and other Activation
level of Startup Experience over time as more people get needs a higher share of its startups raising seed and Series phase ecosystems, this report analyzes some key determinants
involved with the ecosystem. A rounds. of scaleup creation. Overall, on a global level, we find that start-
●● Frankfurt has several areas of latent entrepreneurial talent ●● Grow Global Connectedness and Global Market Reach ups which sell to global markets from their earliest stages enjoy
that need to be better activated. This includes the large faster revenue growth, attract large funding rounds, and have a
●● Frankfurt is, in many ways, a global crossroads, at the center
population of students and corporate employees, but higher likelihood of scaling up. This underscores the importance
of air and rail travel as well as data flows, host to major in-
Frankfurt is also home to a sizeable immigrant community for Frankfurt to focus on growing the Global Connectedness of
ternational events, and one of the most important financial
(including tens of thousands of foreign students), but has its startups.
centers. These assets draw in people from the world’s top
a relatively low share of immigrant founders.
startup ecosystems, and Frankfurt founders build relation-
●● Close the Early-Stage Funding Gap ships with them.
●● Over the past few years, Frankfurt has enjoyed one of the ●● But, Frankfurt’s overall level of Global Connectedness shows
world’s fastest growth rates in early-stage funding. Yet as considerable room for growth. Enhancing this will increase
Startup Output rises, that growth needs to continue and global know-how among Frankfurt founders and increase
even increase, meaning that Frankfurt will need millions of the extent to which they sell outside of European markets.
additional dollars per year in early-stage funding.

Find us on:
7
Global Overview and DNA of Scaleups

Overview
New companies—startups—are in “search of scalable business students and employees at existing firms—scaleups demonstrate
models,” as Steve Blank has described it. Startups that grow rapidly that startups are a viable career option. They attract more foreign
to large size—scaleup firms—are the key driver of job creation and investment capital into the startup ecosystem, and also draw the
economic impact in every country and region. These companies attention of large corporations and industry leaders, who increase
help their ecosystems grow larger, creating a virtuous cycle of their involvement in helping startups.
further scaleup creation.1
Yet the creation of scaleup firms varies widely, and so do the ex-
In the Activation phase of the Ecosystem Lifecycle, a region needs planations for this phenomenon. As a result, several myths have
to focus on “activating” local talent, capital, and resources to in- grown up around scaleup firms. Here, we address some of those
crease the number of startups. There need to be more companies myths (for example, that larger funding rounds create scaleups),
solving problems and searching for scalable business models as and examine some key determinants of why some firms become
solutions for those problems. For continued growth, however, scaleups and why some startup ecosystems seem more condu-
some portion of those startups need to become scaleups: these cive to scaleup creation than others. We find that scaleup firms
are the bridge from the startup ecosystem to wider economic are closely related to the market and geographic ambitions of
impact. founders, the experience that founders have, and the extent to
which startups do (or don’t) sell to global markets.
Scaleup firms are those that grow rapidly to larger size and emerge
as local success stories—some of them eventually get acquired
or go public. Scaleups validate the initial enthusiasm in a startup
ecosystem, sending a strong signal, both locally and beyond, that
startup success can happen in a given place. For local talent—
1 Isenberg citation. Citation to Foster et al. Also cite Criscuolo et al, OECD study
across all countries of startups and job creation: https://www.oecd.org/eco/
growth/Cross-country-evidence-on-start-up-dynamics.pdf.

Find us on:
8
Approach Scaleup Myth Scaleup Myth

It’s Purely a National Issue It’s a Funding Issue
There is no shortage of research on scaleup firms—also known
as gazelles, high-growth firms, and variety of other labels. We Some countries generate more scaleup firms than others. Looking Scaleup firms generally raise larger funding rounds than non-scale-
canvassed the research literature and popular writing on these at the cross-country data, this is incontrovertible: the United States ups. Among the largest scaleups, for example—those reaching
companies to determine the appropriate definition for analysis. and China account for the lion’s share of scaleup firms over the billion-dollar valuations and exits, and exits over $100 million—the
Accordingly, we define a scaleup firm as one that reaches a val- past decade. The United Kingdom, Germany, and Canada have share of Series A rounds over $10 million is strikingly high com-
uation of at least US$50 million within 10 years. Any definition also produced more scaleups than most other countries, but pared to all other Series A rounds (see chart).
necessarily draws a line between those that are “in” or “out.” We trail far behind the United States and China. This distribution is
strived for a definition analytically simple and reflective of firm often attributed to national-level differences. Some purported
dynamics. In our global database on thousands of scaleups and Large Scaleups Raise Larger Funding Rounds
explanations that have been offered are: But Funding Does Not Explain Scaleup Creation
non-scaleups, we looked at how the growth of scaleup firms
correlates with roughly 100 different metrics on ecosystems and ●● The U.S. and China are bigger markets so they create more
startups. scaleups.
40%
% of rounds >$10M
●● Tax law differences at the national level are what explain the 30%
Definition of Scaleups: startups that reach a valuation of at least differences. 20%

US$50 million within 10 years.
●● Cultural differences are the culprit: Germans (so the argument 10%
runs) are more risk-averse than Americans, so the result is
0%
fewer scaleups.
Billion-Dollar Club $100M+ Exits All Series A Rounds
When we look within countries, however, we see considerable

variation in the creation of scaleups. In the United States, for The relationship seems fairly straightforward, and for many—
example, Silicon Valley, Chicago, and New York have produced especially among policymakers—this explains scaleup creation
more scaleups than Boston, Los Angeles, and Atlanta. A similar differences. The conclusion that logically follows is then, “we must
pattern exists in Germany among Berlin, Munich, and Frankfurt. put more money into increasing funding rounds for our startups,
There are certainly national-level factors that may explain the this will create more scaleups!” This has led to several ill-advised
scaleup difference between the U.S. and Germany—for example, funding programs in many places and unintended consequenc-
the tax treatment of stock options. But, the large regional variation es. Unfortunately, funding round size is not a cause of scaleup
within countries demonstrates that differential rates of scaleup production either.
creation cannot be solely explained by the national context.

Find us on:
9
Certainly, funding plays a role in different rates of scaleup cre- What happens in most ecosystems—at least those that are not
Scaleup Production Increases Across Ecosystem Lifecycle
ation, but the gap is not round size. If we look at the distribution Silicon Valley, London, and New York—is that the funnel of start-
of large funding rounds across regions and countries, it turns out ups narrows rather quickly between the seed and Series A stages.
Scaleup Firms as Share of Startup Output

10%
to be fairly even: startups in Toronto raise a similar number of While the “best” startups in Toronto access big investments from 9% 8.7%
8%
large Series A rounds as those in London, and more than those outside the ecosystem, those that are just below the best of the 7%
in Tel Aviv (see chart). best do not. They must rely on local funding which, in many places, 6%
becomes scarcer at the Series A stage and beyond. These less- 5% 4.9%
4%
than-the-best startups thus get fewer resources, restraining their 3%
3.0%
Large Funding Rounds are Evenly Distributed and Cannot
Explain Scaleup Differences potential to become scaleups. 2%
1.2%
1.6%
1%
20
0%
The funding challenge with scaleup creation, then, is one of deal Activation Globalization Expansion Integration Silicon Valley
15
flow: the funding funnel needs to be widened for more of the less-
% of rounds >$10M
than-the-best startups in ecosystems like Toronto. More scaleups

10
won’t come from simply pumping money into larger rounds for Larger Ecosystems Produce More Billion-Dollar Exits
5 the best startups—it will come from more startups getting any
funding at all. 0.08% 0.078%
0 0.07%
# of $ Billion Exits as Share of

y
ty
on
iv
to
es
om
da
a
lle
an
in
rli
Av
Ci
on
at
na
nd
Ch
Be
gd
Va
0.06%
m
St
rk
Ca
Te
Lo
To
er
n
Yo
n
Ki
G
co
te
Startup Output
0.051%
ew
d
ni
li
te
Si
0.05%
N
ni
Scaleups Across the Ecosystem

U
0.04% 0.039%
Lifecycle
0.03%
Yet Tel Aviv generates more scaleups than Toronto—2.5 times 0.02% 0.018%
0.021%
as many, in fact, over the last decade—and nearly as many as 0.01%
London. Evidently, the top startups in Toronto are able to raise Scaleup creation does not vary according to country-level factors 0.00%
Activation Globalization Expansion Integration Silicon Valley
large funding rounds, and these rounds mostly come from inter- or funding round sizes. Instead, what we find is that the creation
national investors outside the ecosystem. Toronto’s best startups of scaleup firms is tightly linked with an ecosystem’s phase in the
do not lack for funding access, they are simply accessing bigger Ecosystem Lifecycle. As shown in the chart, Integration phase eco- from the other Integration-phase ecosystems because of the high
rounds from non-local investors. The answer, however, is not to systems produce more than ecosystems in the Expansion phase, number of scaleups in Silicon Valley).
increase Series A and beyond funding from local investors. The which have a higher rate of scaleup creation than the Globaliza-
issue is deal flow and attrition, not round size. tion phase. The lowest number of scaleups is in Activation phase Scaleup firms help drive ecosystem growth, creating a virtuous
ecosystems. (Here, we have broken out Silicon Valley separately cycle of higher Startup Output, greater Resource Attraction, and
deeper levels of Startup Experience, all of which help lead to the

Find us on:
10
creation of even more scaleups. Expansion phase ecosystems

Characteristics of Scaleups and Most important are connections to founders in the world’s leading
generate scaleups at a rate 4 times higher than Activation phase startup ecosystems. Looking at scaleups and non-scaleups, we
ecosystems. For just Silicon Valley, scaleup creation is 7.4 times Non-Scaleups find the same relationship: founders of scaleup firms have much
higher than ecosystems at the Activation phase. higher levels of Global Connectedness than those of non-scaleup
We find significant differences between scaleups and non-scale- companies. Across all phases of the Ecosystem Lifecycle, scaleup
Larger and more developed startup ecosystems also produce ups across several different variables.
more scaleups that become billion-dollar exits. In our model,
these are a key “trigger” for faster growth in size and higher levels Startup Revenue Growth vs. Global Market Reach
of Resource Attraction from outside the ecosystem. Expansion Scaleups are More Globally Oriented
2.1 x Revenue Growth
phase ecosystems produce twice as many companies in the “bil- $200k Acceleration
Scale-up
lion-dollar club” as ecosystems in the Activation phase—for Silicon Startups are more likely to become scaleups when they sell to > 50% Foreign
up Customers
Valley, it’s 4.4 times as many. global customers, especially those not only outside the country $150k Sta
r t
Monthly Revenue
e d
cus
-Fo
but also outside the immediate continental region. European ba
l l y
$100k Glo
This is not merely a function of size, where larger ecosystems startups, for example, can sell fairly easily to other countries in < 50% Foreign
rtups
d Sta
(with higher Startup Output) have more opportunities for scaleup Europe, but they also need to look for customers outside Europe. $50k
io n ally-F
o c u s e Customers
Na t
firms to emerge. More developed startup ecosystems produce The same applies, for example, to Canadian startups, which need
$0k
more scaleups as a share of overall Startup Output. Across the to look beyond the U.S. market. Several years of Startup Genome Time
Ecosystem Lifecycle, then, scaleup firms are both cause and research has established that startups selling to global markets
International B2B Startups (excluding U.S. and Canadian companies)
effect: they help trigger faster growth in ecosystem size, and they enjoy revenue growth that is twice as high as
result at higher rates from that growth. This circular logic doesn’t those selling mostly to domestic markets (see
offer much in terms of guidance of ecosystems in the Activation chart). This Global Market Reach is a Success Factor Founders of Scaleup Firms Have Much Higher Levels of Global Connectedness
Than Those of Non-Scaleup Companies
and Globalization phase—more scaleups will come from … more in our assessment model.
scaleups.
Activation Phase Difference 600%
600%
Globalization Phase Difference 555%
523%
Faster revenue growth leads to higher levels of Expansion Phase Difference
Difference of Average Scaleup

500%
Integration Phase Difference
Performance vs Startup
To identify the actions that ecosystems can take to foster the funding (and larger funding rounds) and increases 400% 391%
creation of more scaleups, we analyzed the individual differences the likelihood that a startup becomes a scaleup. 300% 290%
221%
between scaleup firms and those startups that do not become Across the world, greater Global Market Reach is 200%
140%
162%
scaleups (referred to here simply as, non-scaleups). Even in larger closely associated with a higher level of Global 100% 89% 93%
2%
and more developed ecosystems, we see important differences Connectedness—this captures the extent to which 0%
-9%
between scaleups and non-scaleups, although these firm-level founders in any given ecosystem have significant -100%
Average Connections to Top Average Founders Met in Home Number of Ecosystems Founders
differences are closely related to Lifecycle phase attributes. and meaningful connections to founders elsewhere. Ecosystem Ecosystem Travelled to on Average

Find us on:
11
firms are 88% more likely than non-scaleups to have founders with those in Activation and Globalization phase ecosystems—to the
high levels of Global Connectedness. This is not simply a function global frontier of innovation. Through those connections, found- Founder Ambition
of these firms being located in ecosystems that are themselves ers learn about global problems being addressed by startups and
Founder Ambition measures how big founders are think-
at the center of the global network of ecosystems. Founders of others, and what solutions have been tried to those problems.
ing in terms of market and motivation. The Ambition factor
scaleup firms actively build global connections to a much greater As such, Global Connectedness helps raise the ambition level of
captures the reason founders are doing a startup (changing
degree than founders of non-scaleup firms. founders: they realize what’s possible both in terms of innovation
the world v. getting rich), whether they’re working on a glob-
and market size.
ally-leading product, and how large of a total addressable
We measure two primary ways in which founders build Global
market they are targeting.
Connectedness: by traveling to the world’s top ecosystems, and Startups that aim for global markets from the very beginning are
by meeting founders from those ecosystems when they travel more likely to sell globally, grow faster, and become scaleups.
to the local ecosystem. Across the Lifecycle phases, founders of Across all phases of the Lifecycle, scaleup founders are 56%
scaleup firms travel to top ecosystems at three times the rate as more likely to say that they are targeting the global market first. Aiming for global markets also reflects a higher overall level of
non-scaleup founders. Likewise, scaleup founders establish Global The importance of go-global strategy and ambition is particularly ambition among founders, and we find that scaleup founders
Connectedness through locally meeting other founders three relevant for firms in Activation and Globalization phase ecosys- express a level of ambition that is 2.5 times higher than non-scale-
times more than those at non-scaleup firms. The one exception tems. Scaleup founders in these ecosystems are twice as likely up founders. Aiming for larger markets (the total addressable
to the latter relationship is in Activation phase ecosystems: con- as their non-scaleup peers to target the global market first. The market), seeking to change the world through their company,
nections to founders from top ecosystems are made locally at differences between scaleups and non-scaleups on this dimension and targeting global markets—these are the evident hallmarks
about the same rate by founders of both scaleup and non-scaleup diminishes across the Lifecycle phase because the larger ecosys- of scaleup founders.
firms. This is partly a function of the overall low number of visits tems in Integration phase (such as Silicon Valley and London) are
by founders from top ecosystems to Activation phase locations. the global market frontier. One further dimension of global orientation differs significantly
Some Activation phase ecosystems, through conferences and between scaleups and non-scaleups: scaleups are 49% more likely
events, do have high rates of this local meeting—focused efforts to have an immigrant as a founder or co-founder. This relationship
Scaleup Founders Have a Higher Overall Level
are made to build connections between founders in such places.2 of Ambition Compared to Non-Scaleup Founders is consistent across each phase of the Lifecycle. While this reflects
national-level factors to a great degree (since immigration policy
A higher level of Global Connectedness is a major driver of greater is usually a national policy issue), it also reflects regional variation
40% 43%
Average Founder Ambition
Global Market Reach because it exposes founders—especially in attraction and efforts to welcome immigrant founders.
30%
2 Across these Global Connectedness metrics, scaleup firms in Silicon Valley show
20%
no difference compared to non-scaleups. This is because Silicon Valley is the cen-
ter of the global network and the global frontier of innovation. Thus, the scores for
17% Experience Matters
10%
other ecosystems largely capture the extent to which founders from other places
make connections to Silicon Valley. Founders in Silicon Valley do not need, for
example, to travel elsewhere to make connections or learn about globally-leading
0% Prior experience in another scaleup, or at least two years in a
Startup Average Scaleup Average
problems. startup, is strongly associated with scaleup firms. Scaleup firms
Find us on:
12
likely related to national and regional tax laws, specifically the tax globally, almost certainly mean that a startup has a very small
Scaleup Firms Have Higher Shares of Growth Experienced
Founders treatment of capital gains. Usage of stock options for employees chance of becoming a scaleup. So what can ecosystems in the
Startups
also reflects the depth of Startup Experience in an ecosystem, Activation and Globalization phases do to help foster the creation
60% Scaleups
since it also reflects the overall knowledge and familiarity with of more scaleup firms?
Average Percentage of Growth
50% 49%
leading startup practices.
Experienced Founders
Difference: 63%
40%
Difference: 29%
●● Build Global Connectedness. Helping founders build rela-
tionships with their peers elsewhere—especially in top ecosys-
30%
30%
Lessons Learned for Smaller

22%
20% 17% tems—is the best way to raise the level of founder ambition
and increase their Global Market Reach. This can be done by
Ecosystems
10%
0%
encouraging founders from top ecosystems to travel to your
Hypergrowth Experience Startup Experience
ecosystems, perhaps to a conference. While there, deliberate
Scaleup firms are associated with higher levels of Global Market efforts need to be made to help founders build relationships
are 63% as likely to have a founder with prior startup experience Reach, greater Global Connectedness, and deeper levels of with each other. Founders from your ecosystems should also
as non-scaleups, and 29% more likely than non-scaleups to have Startup Experience among founders. Put another way, startups be encouraged to travel to top ecosystems.
a founder with prior experience in a scaleup firm, what we also with founders who have little experience and low Global Connect-
●● Connect to Corporate Experience. Most programs that work
call “hypergrowth.” This latter finding, however, does not apply edness—and lower levels of go-global ambition and strategy—sell on collaboration between startups and large corporations
to scaleup firms in Activation phase ecosystems—their founders to global markets at low rates, resulting in slower revenue growth, focus on either bringing more innovation into corporations or
do not have prior experience in a scaleup or startup. This is not lower funding rounds, and a lower likelihood of scaling up. helping startups connect to corporate customers. Our scaleup
surprising: there are fewer opportunities to gain such experience analysis suggests that large companies—especially technology
in smaller ecosystems. Causality can often appear to be mixed across these different companies—are home to another key resource for startup
characteristics of scaleup firms and founders. If a founder is glob- ecosystems: experience. Activation phase ecosystems do not
Yet a different type of experience can be gained in both Activa- ally connected and says she is aiming for a large global market, yet have deep levels of Startup Experience among founders,
tion and Globalization phase ecosystems that is associated with those won’t necessarily matter if the company doesn’t actually
especially experience with rapid growth. And, while corporate
scaleup firms: working in a large technology company. It appears produce a high-quality product or service. Having prior scaleup
experience is not a substitute for experience in a startup or
as if, especially in earlier-stage ecosystems, working in a large experience does not guarantee future scaleup success, nor does
scaleup, it can be a key resource in the Activation phase.
technology company is partially (but not fully) a proxy for working being globally connected. But, they make it far more likely that a
in startups and scaleups. firm will grow faster and raise more funding than startups that
do not have these attributes.
Another indicator of experience is the greater extent to which
scaleup firms provide stock options to all employees—they do so Most importantly, it is clear from our analysis that having less
at about three times the rate as non-scaleups. As noted, this is experience and lower ambition, and not being well-connected

Find us on:
13
Frankfurt Ecosystem DNA

Economic “
The fourth-largest metropolitan region in Germany, Frankfurt- The Frankfurt Ecosystem is develop-
Rhine-Main is at the geographic and financial center of Europe.
ing at a remarkably fast pace. During
and Ecosystem
Located at the confluence of two major rivers, the area is the
crossroads of hundreds of multiple inland ports, miles of motor- the last two years, universities, corpo-
ways, several railroad lines, and one of the largest airports in the
rates and policy leaders have joined
Overview world. On top of this physical infrastructure, the Frankfurt region is
also at the fore of information exchange, with the largest Internet forces to collaborate closely towards
node in the world. These assets make Frankfurt a central hub in one common goal: making Frankfurt a
the global exchange of people, ideas, goods, and data.
startup hotspot. The magic formula of
This globally-oriented infrastructure is reflected in a demograph- Frankfurt is its huge talent base paired
ically diverse population. Astonishingly, 40 percent of Frankfurt’s
with a solid infrastructure, lots of mul-
population is foreign-born, an indication of the city’s cultural
openness and tolerance. This diversity supports a high quality of tinationals and a local market of 5.7M
life. Recently, Frankfurt was named one of the 20 greatest cities inhabitants. In particular, with regard
to live in, ranking seventh on the list.1 This international culture
results in part from the city’s long history as a crossroads, and a
to the sub-sectors of Fintech, Cyberse-
globalized regional economy that attracts people from all over curity and Big Data, Frankfurt has de-
the world.
veloped a leading position with various
promising scale-ups and startups.
Thomas Funke and Sebastian Schäfer
Co-Directors at TechQuartier
1 “These are the 20 greatest cities to live in,” Daily Telegraph, March 20, 2018, at
https://www.telegraph.co.uk/travel/galleries/The-worlds-most-liveable-cities/.

Find us on:
14
Ecosystem Overview
Nearly 400 tech startups are now active in the Frankfurt region, ●● Goethe Unibator: The incubator program of the Goethe Uni-
and recent exits and funding rounds have helped drive total eco- versity Frankfurt, called Unibator, promotes students, employ-
system value to $1.8 billion. These startups enjoy a supportive ees, and alumni of all departments in the implementation of
environment that includes 32 incubators, 24 coworking spaces, scientific knowledge and resulting business ideas into products
and 10 accelerators. With nearly every university getting involved, and services. Founders go through an 18-month program to
and more public investment into the ecosystem, Frankfurt Rhine- develop a validated and scalable business model. The Unibator
Main’s landscape of support organizations keeps growing. has a focus in the field of Fintech together with the Department
of Economics of the Goethe University.
●● Accelerator Frankfurt: Accelerator Frankfurt is a four-month
Relevant Startup Support Organizations in program for B2B startups in the fields of Fintech and Cyber-
Frankfurt security, though it is not limited to those. Startups receive
over 200 hours of education, mentorship, and consulting in
●● blackprint PropTech Booster: The premier hub for prop- addition to a co-working space. The program ends with a de-
erty tech (or PropTech) innovation in Germany, this is a net- mo-day where the startups pitch to investors to raise follow-on
work-driven accelerator for startups that aim at transform- funding.
ing the conventional approach to the real estate industry by ●● PnP Fintech Europe: Plug and Play, one of the largest global
embracing digital technology. They host batches of up to five innovation platforms, and TechQuartier recently launched a
teams over six months at their offices in Frankfurt. partnership called “Fintech Europe”. The program aims to bring
●● TechQuartier: TechQuartier is an international community, together startups and banks so that startups can pilot their
incubator and co-working space located in Frankfurt. With their solutions with leading financial institutions. First corporate
unique network of corporate and technology partners, service partners are Aareal Bank, BNP Paribas, Deutsche Bank, DZ
providers, investors, academic institutions and government Bank, NETS Group and DanskeBank.
officials, they offer an ideal environment for ambitious entre-
preneurs to trade ideas and scale their businesses. Frankfurt boasts a mature and diverse corporate landscape, and
●● HIGHEST: HIGHEST (Home of Innovation, GrowtH, Entrepre- these large corporations have significantly increased their activity
neurShip and Technology Management) is the Startup and in the startup space through investment into startups, incubation
Innovation Center at Technische Universität Darmstadt which and acceleration programs, and other forms of cooperation. This
offers numerous support services to startups and entrepre- positive trend has also constantly been highlighted by our local
neurs, including labs for digital technologies from the areas of interviewees.
Cybersecurity, Artificial Intelligence and 3D-Print.

Find us on:
15
“
The dynamic between startups and include node.energy, a provider of digital solutions for manag- ●● Fincite: Offering a platform for robo-advisory services, Fincite
ing microgrids, who received some $900 thousand in funding. is helping expand the area of digital asset management. Fincite
corporates, like banks or insurance offers their product to financial institutions, that can use it to
●● UX Accelerator in Cooperation with PwC: PwC’s UX acceler-
companies, has changed radically in ator program for startups helps startups to find out how they analyze, monitor, and optimize existing portfolios and create
dynamic savings and investment plans. Founded in 2011 the
recent years. There’s a new mindset can improve the user experience by getting into the mind of
their customers. The program focuses on UX experiments bootstrapped company now has some 60 employees. Prom-
and attitude, and cooperation between and enables startups to conduct their own UX research and inent customers include Deutsche Bank.
startups and corporates are now com- design studies with users. ●● 360T: 360T is one of the leading global providers of web-based
monplace. ●● MMI SportsTech: Eintracht Frankfurt, a main player of the trading technology. Their best-in-class trading technology
German Bundesliga has teamed up with TechQuartier and enables clients to trade OTC (Over-The-Counter) financial
Simon Nörtersheuser created a program to help SportsTech Startups boost their instruments. The company was acquired by Deutsche Börse
Co-Founder at Policen Direkt Group business. Money meets Idea — MMI SportsTech is a program in 2015 for $796 million, making it the most valuable German
tailored to early-stage startups that want to raise capital for Fintech exit of all times.
their sports business. ●● Bettzeit: Bettzeit is one of the most successful sleep startups
in the world and has established itself as a key player in the
Relevant Programs with Corporate European sleep market. Started in 2013 the company has
Over the past years Frankfurt has produced a number of interna-
Involvement in Frankfurt tionally recognized startup success stories that helped to trigger grown to 130 employees. The company’s key brand is called
the ecosystem’s growth. Dormando, a multi-brand online-shop for mattresses. Bettzeit
●● Merck Accelerator: Based in Darmstadt, the “City of Science,” received funding from private investors, High-Tech Gründer-
the Merck Accelerator offers a three-month program, where fonds and Beteiligungsmanagement Hessen.
startups benefit from experienced mentors, a robust training Startup Success Stories in Frankfurt
program and the backing of one of the world’s leading science
and technology companies. ●● Clark: Clark is an Insurtech startup, offering digital insurance
●● EY Startup Academy: The EY Start-up Academy is a 12-week brokerage, delivered through a convenient mobile app. The
program, addressed to Fintech and other Tech startups, who company has recently closed $29 million in Series B funding
already have a minimum viable product or proof of concept. led by fintech investor Portag3 Ventures, and VC fund White
Startups get the opportunity to improve their business model Star Capital. This brings Clark’s total funding to $45 million.
and its main factors with the structured advice and help from The company has some 100,000 customers, making it one of
industry experts. Success stories out of the Startup Academy the largest digital insurance players in Europe.

Find us on:
16
Economic Overview
The downtown skyscrapers of Frankfurt, visible for miles, symbolize The economy and cultural scene are enhanced by Frankfurt’s high
the global orientation of Frankfurt’s culture and economy. Home concentration of universities, art colleges, and research institutes,
to international banking headquarters, the European Central which few other places in Germany can match. The thirty insti-
Bank, and the Frankfurt Stock Exchange (the 10th-largest in the tutions of higher education in Frankfurt Rhine-Main enroll over
world), Frankfurt is a global financial hub. Despite the importance 230,000 students; 14 percent are foreign students. The majority
of finance to Frankfurt’s economy and startup ecosystem, the of these universities offer dedicated startup and entrepreneur-
region boasts a highly-diverse economic mix driving growth. ship support and have joined forces with the initiative “Startup
Hochschulnetz FrankfurtRheinMain.”
Because of the region’s infrastructure assets, the logistics and
transport sector accounts for twice as much employment as Alongside these universities, Frankfurt boasts world-class research
finance. Also significant are automation, automotive, consulting, organizations such as the Fraunhofer Institutes, Leibniz Associ-
and chemistry, pharmacy, and biotechnology. Frankfurt Rhine- ation and Max Planck Institutes, among others. The region’s 22
Main also hosts a number of international events each year that research institutions are responsible for breakthrough research,
draw attendees from all over the world. The biggest is the Inter- innovative products, and new processes. Academic research in
national Motor Show (IAA) for passenger cars, which is held every Frankfurt is complemented by corporate research and develop-
other year. The Frankfurt Book Fair hosts over 7,100 exhibitors ment (R&D) in production, life sciences, robotics, and artificial
(with 4,700 from other countries), and is one of the largest book intelligence. Corporate R&D spending reached €5.5 billion in 2017.
and media events in the world.
Chemistry, pharmaceuticals
Share of Employment in Frankfurt Region by Industry Automation Automotive
and biotechnology
Consulting Finance Healthcare
Information and communication Cultural and creative
Logistics and transportation
technology industries
Energy and environmental
Aerospace technology Material engineering engineering
Other Industries
5.8% 5.4% 5.1% 8.7% 6.1% 14.6% 5.2% 3.7% 11.8% 1.4%4.0% 3.7% 24.5%
Frankfurt /
Rhine-Main
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: “Wissensatlas 2018: Menschen. Chancen. Zukunft. Eine Vermessung der Wis-
Copyright © 2018 Startup Genome LLC. All Rights Reserved. sensregion FrankfurtRheinMain.”
Find us on:
17
“
The universities and research institutes and corporate R&D facil- The Frankfurt Rhine-Main region is one
ities are spread throughout the region, as the large urban core
of Frankfurt is surrounded by nearly 200 smaller cities around
of the strongest business locations
the Rhine-Main region. Many of these serve as smaller regional in Germany and even in Europe. It’s
hubs. Each individual city has its own character, offering a variety
where a strong base of service provid-
of living and working options for residents.
ers with a high level of research and
development share meet young com-
panies that are tackling digitalization
issues. The hype surrounding Berlin,
Munich and Hamburg is there because
those are traditionally the big cities
that everybody knows. No doubt that
these are great startup cities, but if we
look at the entire region of Frankfurt
Rhine-Main with its 5.5-6 million inhab-
itants and look at the entire econom-
ic power, most of the other German
cities just can’t keep up.
Tarek Al-Wazir
Hessian Minister of Economics, Energy, Transport and
Regional Development

Find us on:
18
Identifying
The entrepreneurial revolutions of the recent past have been built a local Agtech sector. A city dominated by traditional banking or
almost entirely on the foundations of the Internet, driven by the finance could position itself as a leader in Fintech.
Sub-Sector
information and communications technology sector. The value of
these revolutions was overwhelmingly captured by Silicon Valley, When we assess a startup ecosystem we look for both existing
the world’s preeminent powerhouse for manufacturing the sili- and emerging areas of economic strength. We seek out latent
Strengths con-based microchips the Internet itself relied on. potential or areas that are adjacent to the Third Wave of the IT
revolution. Just like individuals and companies, startup ecosystems
Looking ahead, the entrepreneurial revolutions of the present and must specialize in order to advance their growth.
future are taking us further beyond just information technology
and Internet-focused businesses. While the prominent technology For this report, TQ and Startup Genome identified three sub-sec-
companies from the early 1990s to the 2000s have built business- tors where the region has potential to build global competitive-
es that live almost entirely on the web and mobile with things like ness and economic value. These are closely integrated, with
search, email, social media, and video—the prominent technol- alignment across talent and the types of problems that startups
ogies of the future will live in the “real world.” They will transform are addressing:
not only what we do online, but also what we do offline. Sectors
affected will include transportation, healthcare, heavy manufac- 1. Fintech
turing, agriculture, and many more brick-and-mortar industries. 2. AI, Big Data & Analytics
3. Cybersecurity
Entrepreneur and investor Steve Case calls this the Third Wave
of the Internet revolution. The first wave of this revolution was
carried out by companies like Case’s own AOL, which helped build
Internet’s very foundations. The second wave was led by busi-
nesses like Google and Facebook who built social media, search,
and email products for the web, while businesses like Snapchat
created apps relying on smartphones. The Third Wave will bring
these developments and learnings to the “real world” and into
specific industry verticals.
Regions without traditionally tech-based economies can still

succeed and grow by focusing on the Third Wave. A fruit and
vegetable exporting region, for example, can invest in building up

Find us on:
19
Sub-Sector Strength #1
“
In 2015, the acquisition of Frankfurt-based 360T represented Frankfurt has a strong financial cluster,
the largest ever Fintech exit in Germany. This helped catalyze
which is a huge asset for the city.
Fintech the dense and dynamic Fintech sub-sector in Frankfurt: Fintech
startups here received more than 50% of local VC investment
between 2012 and 2017. The sub-sector’s growth is supported
Most people in the finance world cur-
rently are regularly in Frankfurt, even if
by Frankfurt’s status as a global financial hub.
it is just for visiting partners or events.
Financial technology—Fintech for short—describes the evolving There’s so much know-how in the
intersection of financial services and technology. Broadly speak-
ing, Fintech is anywhere technology is applied in financial services
ecosystem. You will always find
or used to help companies manage the financial aspects of their specialists from different fields to
business, including new software and applications, processes and
engage with in-depth.
business models. Fintech products and services can be found
within Retail, Corporate and Investment Banking, Asset Manage- Ralf Heim
ment, Transaction Banking, Insurance, CryptoFinance and several Co-CEO at Fincite GmbH
others.
talent and the corporate demand that Fintech startups need. Most
We classify Fintech as a “mature” sub-sector: while it is still growing of the German and international banks in the city have launched
in terms of funding and startup formation, it is also the sec- programs specifically tailored towards the needs of Fintechs and
ond-largest sub-sector worldwide in our analysis. Incumbents Insurtechs.
in the financial sector have increased their collaboration with
startups, somewhat reducing the “disruptive” nature of Fintech, Primary examples are Deutsche Bank’s Digitalfabrik, a program
at least compared to other sub-sectors.2 that supports the development of digital banking projects or Com-
merzbank’s main incubator, an early stage investor in Fintechs
As the European Union’s financial center, Frankfurt is naturally and company builder in the banking sector, as well as the recently
positioned for startup success and growth in Fintech. Hosting the founded holding company of state bank Helaba, Helaba Digital,
European Central Bank, the German Central Bank, Frankfurt Stock which invests into innovative, digital companies.
Exchange, the Federal Financial Supervisory Authority Bafin, and
85 multinational banking headquarters, Frankfurt has both the Plug and Play, the largest global innovation platform, and Tech-
Quartier recently launched the program “Fintech Europe”, in part-
2 Citation: “The Growth and Decline of Startup Sub-Sectors,” GSER 2018.
nership with Aareal Bank, BNP Paribas, Deutsche Bank, DZ Bank

Find us on:
20
“
What is special about the region is
that there is a relatively high share of
Fintechs that a) are B2B, and b) aim
to take over only a part of the value
chain, rather than disrupt the whole
industry. […] When I look at our tradi-
tional house, a lot has changed over
the last two years. The willingness to
have conversations and discussions
with Fintechs, seeking value in their
ideas and suggestions, has increased
significantly.
Philipp Kaiser
Managing Director at Helaba Digital
and NETS Group. The program aims to bring together startups

and banks so that startups can pilot their solutions with leading
financial institutions.
“Frankfurt is a major financial capital and on track to also become

a global Fintech hub. We are very proud to be launching our first
fintech open innovation platform for Europe, and we invite our
partners from across the continent to join us as we build a fintech

Find us on:
21
platform that is relevant not just to Europe, but the world,”3 Saeed crowdfunding technology, the company also offers important
Share of received VC investment into FinTech (from 2012 to 2017)
Amidi, CEO and Founder of Plug and Play. features such as marketing, compliance and investor relations.
Their most successful project is GLS Crowd (together with GLS 60%
55%
With such a strong startup support environment and collabora- Bank), an equity crowdfunding platform where socio-ecological
Share of received VC investment

50%
tion opportunities in place, the ecosystem’s strength in Fintech is companies can raise money, and Zinsland where investors have
40%
borne out by some impressive numbers: already invested more than €17 million in successful real estate
into FinTech
projects across Germany. 30%
21% 21%
20% 19%
13%: Frankfurt has the highest concentration (tied with 10%

12% 11%
9%
Finanzguru
another ecosystem) of startups in a given sub-sector globally 3%
0%
across the nearly 100 ecosystems we studied. The Finanzguru is a financial assistant based on AI, offering users
n
is
a
m
t
ty
i
o
nk
ni
ur
on
ol
Pa
Ci
nd
to
effortless control over their finances and contracts (e.g., electric-
kf
si
el
kh
rk
Lo
Es
el
an
rc
55%: More than half of all local VC investment went into
oc
Yo
H
Ba
Fr
St
ew
ity suppliers, mobile companies). After users connect their bank
N
Fintech startups between 2012 and 2017. account to the app, the AI identifies the user’s income, expen-
Share of FinTech Startups in Ecosystem
$800 million: The largest German Fintech exit of all time ditures and contracts based on their past bank transactions.
took place in Frankfurt: the foreign exchange trading company Through this, the Finanzguru advises users proactively on their 14%
13%
360T got acquired by Deutsche Börse, which runs the Frankfurt finances with cheaper contracts, reminds them of notice periods, 12%
12%
enables them to cancel unwanted contracts with a few clicks and
Share of # of Startups
10%
Stock Exchange. 10%
provides them with saving tips.4 The company was founded in 8%

8% 8%
7% 7% 7%
October 2016 and received around $1.2 million from Deutsche 6%
Promising Fintech startups in Frankfurt include: Bank. 4%
2%
CrowdDesk FastBill 0%
on
is
a
na
m
rt
ty
i
nk
i
r
on
u
ol
Pa
Ci
nd
lo
CrowdDesk is a white label crowdfunding solution that powers
kf
si
FastBill Brasil is a financial management platform for freelancers
kh
t
rk
Lo
Es
el
an
rc
oc
Yo
H
Ba
Fr
St
ew
several well established crowdfunding platforms. Next to the and small businesses. Users can manage their charges, pay-
N
ments, bills and more. FastBill was founded in 2011 and was
3 “Plug and Play and TechQuartier Announce The First Five Corporate Partners to bootstrapped until they received their Series A round in May
Join The Fintech Europe Innovation Platform in Frankfurt.” PR Newswire: News 2017 by the Frankfurt-based fintech investor FinLab. By the time
Distribution, Targeting and Monitoring, PRNewswire, 23 Apr. 2018, www.prnews-
wire.com/news-releases/plug-and-play-and-techquartier-announce-the-first-fi-
of the funding round, 40,000 small businesses and freelancers
ve-corporate-partners-to-join-the-fintech-europe-innovation-platform-in-frank- were already using the platform for their accounting.
furt-300634143.html.
4 https://techquartier.com/startup/finanzguru/
Find us on:
22
Sub-Sector Strength #2 Some 8.5% of all startups in Frankfurt are in the Artificial Intelli-
gence or Big Data & Analytics sub-sector and, over the past five 8.5%: Frankfurt has a high concentration of AI, Big Data &
AI, Big Data years, the sub-sector captured 13% of all local VC investment.
Globally, AI, Big Data & Analytics is classified as a Growth Sub-Sec-
Analytics startups.
13%: More than 13% of all local VC investment went into AI,
& Analytics
tor, mostly driven by the rapid rise of artificial intelligence startups.
Despite being the fourth-largest sub-sector in our analysis, AI Big Big Data & Analytics startups between 2012 and 2017.
Data & Analytics is experiencing rapid growth in funding deals and
$55 million: Prominent Frankfurt startups examples in
exits—faster, in fact, than Fintech and Cybersecurity.
this space include Arago, a company that helps businesses
automate their IT processes through intelligent automation and
Because startups in this sub-sector in many ways power growth
that has raised $55 million in funding.
in other areas, this is perhaps the biggest growth area for Frank-
furt’s startup ecosystem.5 The region is well-positioned in this area.
With many local universities running specific programs tied to AI, Promising AI, Big Data & Analytics startups in Frankfurt include:
Big Data & Analytics, the ecosystem has an academic backbone
supplying startups with input and talent.
Intelligent Data Analytics (IDA)
For example, the Frankfurt Big Data Lab Start-up Program at Intelligent Data Analytics (IDA) provides solutions in the field of
Goethe University offers general training courses for data com- digitalization, linking corporate strategies with new technical
putation and analytics by startups. Frankfurt School of Finance & possibilities. IDA’s focus is on Smart Data Analytics, Industry 4.0
Management runs a Centre for Human and Machine Intelligence and Digital Transformation. Their two major innovation products
(HMI), which conducts basic and applied research at the intersec- are the analysis framework Moira and the high-performance da-
tion of Artificial Intelligence & Machine Learning, Decision & Social tabase tempusDB. Partners include Lufthansa, NetApp and the
Science, and Finance & Management.6 The Technical University Frankfurt Innovation Centre for Biotechnology. Recently, IDA has
Darmstadt has an Autonomous Systems Lab for Machine Learn- been working with the Frankfurt-based chemicals manufacturer
ing for Intelligent Systems and Robotics with research centered Allessa to set up the digitization strategy of their classical chemical
around the goal of bringing advanced motor skills to robotics using production line.
techniques from machine learning and control.7
5 Citation: “The Growth and Decline of Startup Sub-Sectors,” GSER 2018.

6 “Artificial Intelligence@FS.” Artificial Intelligence | Frankfurt School, www.frank-
furt-school.de/home/about/artificial-intelligence.html.
7 Peters, Jan. “Home Main.” Home - Main - Intelligent Autonomous Systems - TU
Darmstadt, www.ias.tu-darmstadt.de/.
Find us on:
23
Arago
Share of received VC investment into AI & Big Data (from 2012 to 2017)
Arago is a leading German Artificial Intelligence company that
helps businesses improve their IT processes through intelligent 14%
13% 13%
automation. To do so the company develops different kinds of AI
Share of received VC investment

12%
12%
software. Its proprietary AI platform is called HIRO (Human Intel- 10%

10% 10%
9%
ligence Robotically Optimized). Arago got founded by renowned 8%
8%
computer scientist Chris Boos, and is based in Frankfurt and 6%

6%
New York City. Since 2014 leading global investment firm KKR has 4%
supported Arago’s international expansion. In October 2016 they
2%
raised a €55 million private equity round.
0%
on
ris
a
m
t
ty
i
nk
ni
ur
on
ol
Pa
Ci
nd
to
kf
si
el
kh
rk
Lo
Es
el
an
rc
oc
Yo
H
Ba
Fr
Innoplexus
St
ew
N
Innoplexus develops and provides automation platforms primarily
Share of AI & Big Data Startups in Ecosystem
for the Healthcare and Life Science industry leveraging Artificial
Intelligence and Big Data & Analytics. Among other products, the 12%
company offers iPlexus, an end to end platform for Life Scienc- 10%
10.1%
es that generates intelligence and insights across the different
8.5%
8%
stages of drug development and use. Innoplexus serves Fortune 7.0%
6.6% 6.7%
6.4%
6% 5.7%
500 companies in the Life Sciences as well as in the Banking and 4.9%
Insurance sector. The company was founded in 2011 and is head- 4%
quartered in Frankfurt with offices in Pune, India, and Hoboken, 2%
USA. 0%
on
ris
ia
na
lm
rt
ty
ki
n
fu
in
Pa
Ci
nd
o
ho
to
el
s
k
k
Lo
Es
el
an
k
rc
r
oc
Yo
H
Ba
Fr
St
ew
Copyright © 2018 Startup Genome LLC. All Rights Reserved. N
Find us on:
24
Sub-Sector Strength #3 While not nearly as large as the local Fintech sector, Cybersecurity Verimi
is just taking off in Frankfurt and benefits from proximity to the With Verimi (founded in 2017), ten companies from different
Cybersecurity financial industry. In any given year, the typical financial services
organization faces an average of 85 targeted breach attempts,
roughly one every four days. One-third of these attempts will be
industries have joined forces to build a single identity and data
platform called Verimi - a combination of the words “verify” and
“me”. Verimi is developing a single sign-in “master key” meant
successful.8 Investment in cybersecurity supports a secure finan- to simplify the process of logging into websites, a process now
cial infrastructure and helps underpin other sectors in places like dominated by Google, Facebook or Twitter. The idea is that you
Frankfurt. will log in to Verimi in the future, to then have easy access to a
wide range of offers from companies, such as Daimler, Deutsche
Generally speaking, Cybersecurity describes the body of tech- Bank, Lufthansa, Axel Springer or Deutsche Telekom.
nologies, processes, and practices designed to protect networks,
computers, programs, and data from attack, damage, or unau-
thorized access. For our purposes it includes application securi- ITSeal
ty, information security, network security, disaster recovery and Hackers increasingly attack companies through their employees
business continuity planning, operational security, and end-user via phishing emails, phone phishing, usb gadgets, or intrusion.
education.9 Like Fintech, we classify Cybersecurity as a “mature” IT-Seal provides an audit that analyzes the risk of becoming the
sub-sector that is still growing in terms of funding and startup target of social engineering attacks and identifies the most effec-
formation, but not at such a high pace as other sub sectors.10 tive countermeasures. The startup from the “Security Valley” in
Darmstadt got founded in 2015 and is supported by the Highest
Startup Center Darmstadt.
Authada
Authada got founded out of of the Darmstadt University of Applied
Science in 2015. The startup has developed a new identification Share of CyberSecurity Startups in Ecosystem
process. The software is reading the electronic identity in a gov- 1.50%
ernment-issued ID card via a smartphone’s NFC interface. It then

1.38%
1.25%
can verify a customer’s identity in just a few seconds based on
1.00%
officially verified master data. The company received a seven-fig- 0.85%
0.78% 0.76%
ure growth financing package from FinLab, one of the first and 0.75% 0.70%
0.57% 0.54%
largest company builders and investors focused on the Fintech 0.50%
0.40%
in Germany. 0.25%
0%
8 Accenture High Performance Security Report 2016
on
na
lm
ris
ia
rt
ty
i
nk
on
fu
Ci
lo
Pa
nd
ho
si
9 Sub-Sector Report Cybersecurity, Global Startup Ecosystem Report 2018
nk
ce
t
rk
k
Lo
Es
el
oc
a
Yo
H
Ba
Fr
St
ew
Copyright © 2018 Startup Genome LLC. All Rights Reserved. 10 The Growth and Decline of Startup Sub-Sectors,” GSER 2018.
N
Find us on:
25
Frankfurt 360 Ecosystem Assessment

“ Startup Genome’s Science of
The startup ecosystem in Frankfurt This new science we developed has four main components. We
apply this four component framework to Frankfurt in this section.2
is, according to our Lifecycle Model, Startup Ecosystems
in the Activation phase, but well-posi- A. Ecosystem Lifecycle Model—precisely identifying which devel-
In recent years, public and private decision makers around the opmental phase an ecosystem is in helps provide the missing
tioned to keep growing in size to enter
world have devoted more resources to foster vibrant startup eco- focus for decision makers, which enhances the impact of their
the Globalization phase within the next systems at the city, regional, and national levels. Unfortunately, actions. At each phase of the Ecosystem Lifecycle—Activation,
years. A tight-knit startup community, these efforts have been limited by a lack of data and benchmarks. Globalization, Expansion, Integration—different priorities are
Without these, decision makers are unable to focus their actions necessary and different actions need to be taken to accelerate
surrounded by an impressive corpo- and scarce resources. As a result, evidence-based action is in further growth.
rate landscape and a largely untapped short supply.
B. Success Factors—using the nearly 100 metrics we capture
talent pool already indicate the re- with our assessment, we provide clarity on an ecosystem’s
To address this, Startup Genome developed a new science to
strengths and gaps relative to the Success Factors in our
gion’s outstanding potential. precisely assess startup ecosystems, quantify their strengths
Model.
and gaps, and guide action by government and local leaders. The
Marc Penzel dynamic nature of startup ecosystem development is not easy to C. Sub-sector Strengths—we identify key and emerging sub-sec-
Startup Genome
capture, which is why adequate data has been lacking thus far. tors (for example, Fintech or AgTech) in an ecosystem that
Our approach is based on primary research with over 300 orga- provide the starting points for action and improving ecosystem
nizations around the world, data on over a million companies, performance.
and the participation of more than 10,000 startups globally every D. Policy Action—based on the empirical analysis, we develop
research cycle.1 a prioritized plan of public and private actions to build on
strengths and address the Success Factor gaps.
2 Startup Genome, “The New Science of Ecosystem Assessment,” 2018 Global Star-
1 See description of our methodology in the 2017 Global Startup Ecosystem Report. tup Ecosystem Report.

Find us on:
26
A
Based on our Success Factor assessment, the Frankfurt tivation phase ecosystems tend to have lower levels of Startup
startup ecosystem is in the Activation phase of the Ecosys- Experience. Frankfurt is no exception. Compared to the average
Ecosystem
tem Lifecycle. It has enjoyed strong growth in Early-Stage ecosystem in the Globalization phase, Frankfurt is lower on each
Funding and Exit Value in recent years, but remains small of our Startup Experience metrics (see chart). This is normal and,
in size. As is normal for the Activation phase, Frankfurt has as Frankfurt grows, Startup Experience will deepen.
Lifecycle: Frankfurt several important gaps to address, particularly related to

scaleup creation. Yet, Frankfurt also excels in some key areas The principal growth priority for Frankfurt is sheer size, which we
on the Brink of Rapid that will help drive growth. measure as Startup Output, or the number of startups in the eco-
system. With an estimated 300-400 startups in Frankfurt Rhine-
Ecosystem Growth
Here, we look at some broad
recent trends in the Frankfurt
ecosystem. In the following sec-
Ecosystem Lifecycle Model
tions on Strengths and Gaps, we
Activation Globalization Expansion Integration
look at where Frankfurt stands
relative to the key factors ana- Rate of
lyzed on scaleup creation, as well Unicorns
as other dimensions of the Frank-
Global
Resource Attraction & Activation
furt ecosystem.
Rate of
Performance
& Exits
o n
According to our analysis, Frank- t i s
bi nes
Size & Resources

A m d
furt is an Activation phase eco- al ecte
b
o n
system. There are three key com- Gl on Rate of
C Early-Stage
ponents of this determination: Immigration Constraints
Success
Startup Experience, Ecosystem
Size, and Resource Attraction.
National
Leakages
The Success Factor of Startup
Experience captures the depth Frankfurt
of experience and know-how in
an ecosystem—it is a function of
Startup Experience
time and size. For this reason, Ac-

Find us on:
27
to their curricula. National newspapers now regularly report on

Frankfurt Still Developing Startup Experience
The Startup Ecosystem Lifecycle Results for Frankfurt Expressed in Percent of Globalization Average (Glob. Avrg. = 100%) startup successes, and regional entrepreneurship events attract
Startup ecosystems generally evolve through four phases, each attendees from across Europe.
1.00
Percent of Globalization Average

with distinct characteristics such as size, strengths and challenges,
0.81
what triggers them to the next phase, and more importantly, what 0.75
The third component of the Lifecycle phase we examine here is
0.69
should be the objective of local leaders. These phases are Activa-

0.66
Resource Attraction. Startup ecosystem resources are mobile:
tion, Globalization, Expansion and Integration. Local resources are 0.50 people, ideas, capital, and companies all move around the world,
limited—leaders use this Lifecycle Model to identify the right actions
0.39
lured by quality of life amenities, access to other founders and
to take at the right times for maximum impact. This is the only way 0.25
0.26
potential employees, and proximity to potential customers. In
for smaller ecosystems to accelerate and capture a share of the new the Activation phase, ecosystems typically “leak” resources to
economy within the next 10 to 20 years, rather than be left behind. 0.00 larger and more-developed ecosystems: startups and potential
$ Exits > $50M Advisors with Stock Options to Founder Hyper- Founder 2 Years
($B, last 10 years) Equity all Employees growth Experience Experience entrepreneurs leave. The level of Resource Attraction in Activation
ecosystems ends up being negative.
Main, the region is right around the average of Activation phase
Frankfurt has one of the highest rates in the world of startups
ecosystems. This number grew meaningfully since over the past As ecosystems grow bigger and faster, however, attraction in-
locating in coworking spaces (47%), but the region appears to
year. Our last estimation one year ago suggested merely 200-300 creases—entrepreneurs and startups move to an ecosystem from
have a relatively small number of coworking spaces.
startups. Over the next several years, however, Startup Output in other parts of the same country and region, and eventually the
Frankfurt needs to at least double to boost the ecosystem to the world. Frankfurt, even for the Activation phase, has a low level of
next lifecycle phase. The challenge for Frankfurt now is to keep in- Barcelona Frankfurt Melbourne
creasing this growth, encouraging the formation of more startups.
This is indeed one of the key goals of the Ecosystem Masterplan
Startup Output ~1,000 ~400 ~1,100
in Frankfurt, which aims to triple the number of startups over the 500
Number of Accelerators 24 10 21
next several years.
Accelerators per 100 Startups 2.4 2.5 1.9 400
National Startup Attraction
Number of Startups
Global Startup Attraction
Number of Coworking Spaces 114 24 170

Continued growth in Startup Output depends on further acti- 300
Startups per Coworking Space 8.8 16.6 6.5
vation of local resources, expanding participation in the startup
% Startups in Coworking Spaces 27% 47% 37% 200
ecosystem. In Frankfurt, the number of support organizations
and structures available to founders and startups has grown over 100 $100M
recent years. Compared to two ecosystems in late Activation (and In addition to the growth in support organizations in Frankfurt, Exits $B
Exits
close to early Globalization), Frankfurt has a comparable density large companies have sought to increase their collaboration with 0
Activation Globalization Expansion Integration
of support organizations available to its startups. Interestingly, startups, and universities have added entrepreneurship courses

Find us on:
28
Resource Attraction: it attracts fewer entrepreneurs and startups As a result of this growth, Early-Stage Funding per Startup in
Frankfurt Has Outpaced Most Other Ecosystems on Growth in
from around Germany and the rest of the world than the Activa- Exit Value and Early-Stage Funding
Frankfurt (a measure of funding accessibility) is already higher in
tion phase average. Frankfurt
Frankfurt than in other Activation phase ecosystems and is nearly
Activation Average
9
8.15
even with the Globalization phase average.
8
Global Median
They key “triggers” for higher levels of Resource Attraction are
7
large, high-profile exits, those over US$100 million and, at later 6
6.07 In part, Frankfurt’s rapid growth in early-stage funding is a function
Growth Index
stages, US$1 billion (see chart). Such exits have several effects. 5 4.48
5.24
4.59
of the lower base in the ecosystem—but not entirely. As shown in
They act as a broadcast signal, demonstrating that success can 4 the chart, Frankfurt has also seen early-stage funding grow faster
3.05
happen in a particular ecosystem. They draw in resources from 3
than other, comparably small Activation phase ecosystems. As
2
elsewhere: investors and entrepreneurs from outside the eco- Startup Output grows in Frankfurt (ideally doubling or tripling over
1
system come to visit and stay. These exits also serve to further 0
the next several years), early-stage funding will need to continue
activate local resources, drawing in new investors and new entre- Exit Value Growth Index Early-Stage Funding
Growth Index
to grow.
preneurs. Finally, exits lead to a recycling of resources within an
ecosystem as the founders and employees from the successful
company become serial entrepreneurs, experienced employees, In the past four years, Frankfurt has produced five exits over
mentors, and angel investors for a new generation of startups. US$100 million in value (see table). The US$800 million acquisi-
tion of fintech company 360T by Deutsche Borse, which runs the
German Stock Exchange, in 2015 was particularly noteworthy.
Company Exit Size Year Founded in Type of Exit It was really the first Frankfurt exit that attracted considerable
international attention, and it validated the emerging vibrancy of
Hilite $590 million 2014 1999 Acquisition the fintech sub-sector in the ecosystem. We suspect that the 360T
Verivox $180 million 2015 1998 Acquisition acquisition has already helped increase the level of Frankfurt’s
360T $800 million 2015 2000 Acquisition
Resource Attraction.
Phenex
$470 million 2015 2002 Acquisition Propelled by this steady march of large exits, the growth rate
Pharmaceuticals
of exit value in Frankfurt has outpaced most of the world—ac-
Ganymed
$1.4 billion 2016 2001 Acquisition companying this, moreover, has been extremely rapid growth in
Pharmaceuticals
early-stage funding. Already, large exits are helping “trigger” the
growth of resources—in this case funding—in Frankfurt.
Table: Frankfurt has had 5 large, $100+ million exits in the past 5 years

Find us on:
29
B “
Strengths: Local Connectedness and Five to ten years ago, local connect-
Sector Experience edness between the different cities
Success Factor Startup Genome’s analysis of Success Factors looks at what ex-
and assets of the Rhine-Main region
was not a priority. For example People
Analysis: Strengths
plains overall ecosystem performance. We take each factor in our
model, assess the ecosystem, and benchmark it against compa- from Frankfurt didn’t really know what
and Gaps in the

rable ecosystems around the world. This helps decision makers
and stakeholders in an ecosystem gain clarity about where their was happening in Darmstadt and vice
strengths and gaps are, and where actions can be best targeted. versa. Even larger Exits and Successes
Frankfurt Ecosystem Frankfurt currently faces gaps on the identified determinants of
were not widely communicated. This
scaleup creation. The exception is the extent to which founders has changed in recent years with the
in Frankfurt report the ways they build Global Connectedness need for startup cooperation being
(such as meeting founders from international ecosystems locally),
and we examine this in the Gaps section as part of the Global more and more acknowledged by in-
Connectedness analysis. Nonetheless, Frankfurt does exhibit cumbents. Today, various institutions
strengths in several areas that are important for key Activation
such as the Goethe Unibator and the
phase priorities. Overall, the Frankfurt ecosystem needs to grow
larger in size—with strengths in Local Connectedness, Founder Techquartier lead the community
Experience, and Founder Mindset, Frankfurt is well-positioned management, ensuring that incum-
for such growth.
bents and startups get together and
that exchanges between startups are
The Core Community has a Strong Startup Culture, Creat-
ing a High Level of Local Connectedness encouraged.
As the size of the Frankfurt ecosystem increases, success and
Ingo Franz
performance will be supported by a strong culture in the startup
Business Angel and Partner of Kreaxi Ventures
community. That culture—or Sense of Community—is part of
what we measure as Local Connectedness. This refers to the level
of relationships built among founders, investors, and experts in
an ecosystem, and whether those relationships translate into a

Find us on:
30
culture of giving and receiving help. These Local Relationships dicates that culture is just as important (and perhaps more) as munity variable is the extent to which help is given and received
help activate more local resources, and the Sense of Communi- networking. The number of relationships that founders build without expectation of immediate reciprocity. Here, Frankfurt’s
ty undergirds startup performance. In the 2018 Global Startup with their peers and investors is partly related to size: in bigger Sense of Community is quite strong.
Ecosystem Report, we found Local Connectedness to be strongly ecosystems, there will be more opportunities to establish a high
associated with individual startup success and overall ecosystem number of relationships. Sense of Community, however, is unre- The emerging support structure for Frankfurt startups is clearly
performance. Most importantly, perhaps, not being locally con- lated to size: no matter how many relationships there are, if the contributing to this strong Sense of Community. Nearly half of
nected is linked to lower startup performance.3 community’s culture is one of giving and receiving help, that will Frankfurt startups work in a coworking space such as TechQuartier
help support startup success. or CoWork&Play (see chart). This is significantly higher than the
Ecosystem stakeholders in Frankfurt have created a very average among other Activation phase ecosystems. On average,
strong Sense of Community—the 7th-highest in the world, Too many entrepreneurship support organizations focus merely around 9 startups work together in each coworking space, ensur-
in fact. Sense of Community captures the culture of a startup on the quantity of relationships, with a bevy of networking events ing ample opportunity to meet, learn from each other, and offer
ecosystem, measuring the extent to which founders give and for founders. Likewise, in many ecosystems we hear complaints assistance.
receive help, and how much help they receive from local investors that relationships are seen only in transactional terms: “I’ll help you
and experts. According to our data, helping others is a powerful only if there’s something in it for me.” Undoubtedly, this happens On their own, coworking spaces and other support organizations
shared cultural value in the Frankfurt ecosystem. everywhere. But, what we try to capture in our Sense of Com- are not enough for either activating local resources or building
Local Connectedness. They are a key resource, of course, but
Across all ecosystems in our analysis, the Sense of simply opening a new coworking space does not allow a funder
Community score is strongly associated with overall Frankfurt Has Very Strong Sense of Community
Founders Receive Help from Other Founders, Investors, and Experts
Ecosystem performance (see chart). Throughout
its global network of accelerators, Techstars has 8
7.1 7.1 High Performance Ecosystems Have Stronger Sense of Community
become known for promulgating the cultural notion 7 6.6
Sense of Community Index
6.2
of “give before you get.” Our analysis has provided 6 5.9
5.6
9
empirical validation for this idea: when founders 5 5

8
Sense of Community Index

7
help each other and investors help founders (in-
Activation Phase
4.2 Frankfurt
4 3.9 3.9 Average: 4.39
4 6
cluding those whose companies they are not in- 5
3
vested in), the entire ecosystem benefits. 4
2
3
1 2
The influential role of Sense of Community in
0 1
startup success and ecosystem performance in- 0
m
n
t
ris
v
i
ty
ur
nk
on
nt
rli
vi
60 50 40 30 20 10 0
a
ol
Ci
nd
Pa
lA
rd
kf
Be
ro
si
el
kh
rk
an
el
Lo
e
Te
To
rc
oc
Ecosystem Rank
st
Yo
H
Ba
Fr
Am
3 See “Local Connectedness,” 2018 Global Startup Ecosystem

St
ew
Report. N

Find us on:
31
“
or sponsor to check off that box and consider the job I observe two main groups of found-
done. Coworking spaces and other organizations are an
Percentage of startups working in co-working spaces
important vehicle for strengthening the quality of rela-
ers in the region: highly experienced
0.6
56%
tionships, but this take hard work by those who run such former bank or insurance managers
Percentage of startups working in
organizations. On top of that, the number of meetups

0.5 who teamed up with clever techies and
47% 46% 45%
and other startup related events has exploded over the
used their extensive knowledge of the
co-working spaces
39% 40%
0.4
37% Activation Phase
last two years, as many of our interviewees emphasized.
industry to start their own businesses.
30% 30% 36% Average: 35%
0.3 27%
Our results indicate that Frankfurt’s ecosystem leaders

0.2
take this responsibility seriously: the high use of cowork-
These people know the inner workings
0.1
ing spaces among Frankfurt startups has helped create of their former company and know
a strong Sense of Community that will support success
0
exactly what kind of problems the
and growth. This is a key building block for the continued
m
on
n
t
ris
v
i
ty
ur
nk
on
nt
rli
vi
da
ol
Ci
customers have. The second, smaller
nd
Pa
lA
kf
Be
ro
si
el
kh
er
rk
an
el
Lo
Te
To
rc
expansion of the Frankfurt ecosystem, and Promotion of

oc
st
Yo
H
Ba
Fr
Am
St
ew
group consists of junior people with

N
Cooperation is one of the key focus areas for the region’s

Ecosystem Masterplan. Together with regional partners,
TechQuartier is working to strengthen the “we’re all in
either very little or no corporate work
Almost 50% of Founders in Frankfurt have Experience in
this together mentality.” The ecosystem’s strong culture experience at all.
their relevant Sub-Sector (Sense of Community), will help promote even further
cooperation among ecosystem stakeholders. Philipp Kaiser
50% Managing Director at Helaba Digital
Founders with Experience in Sub-Sector
46%
45% 44% 44% 43%
40%
36% 37% Frankfurt Founders have Deep Industry Experience
35% 33% Ecosystem
A relatively high share of Frankfurt founders have prior work ex-
30%
There is no single recipe for startup success, but there
Median: 33%
30% 28%
25% 26% perience in the particular sub-sector in which they are doing their
25%
are certain founder characteristics that are important for
20% startup. Nearly half, in fact, bring that experience to bear in their
the arduous entrepreneurial journey. One is substantive
15% startup (see chart). Given the density of the Fintech and AI, Big
10% knowledge and experience in the field in which someone
Data & Analytics sub-sectors in Frankfurt, this likely reflects their
5% is starting their company. The other is a mindset for
strong connections to legacy sectors. With multinational banking
0%
success and endurance: the behaviors and attitudes that
headquarters and other large financial firms, there are plenty of
m
na
on
n
t
ris
v
i
ty
are suited for the startup context. On these measures,

ur
nk
nt
rli
vi
da
ol
Ci
o
nd
Pa
lA
f
Be
ro
si
el
kh
nk
people in Frankfurt who can put their financial sector experience

er
k
el
Lo
Te
To
rc
r
oc
a
st
Yo
H
Ba
Fr
Am
Frankfurt scores well.

St
ew
to work in a Fintech startup. Many of them, too, likely have expe-

N

Find us on:
32
rience working with AI or Cybersecurity applications, Frankfurt’s Gaps Related to Scaleup Creation: Early-Stage
other sub-sector strengths. Early-Stage Funding sums up all the seed and Series A investments
Funding, Global Market Reach, Talent in an ecosystem. Because of data gaps and missing rounds, the
Prior sub-sector experience is important in several ways. It brings figure is necessarily incomplete for each ecosystem. The Early-Stage
Like other Activation phase ecosystems, Frankfurt has gaps that Funding Growth Index normalizes growth rates across ecosystems.
an existing network of contacts with large companies, potentially
need to be addressed. In this section, we look at Frankfurt’s gaps Both metrics capture the availability and accessibility of early-stage
helping increase collaboration. Founders have learned about the
relative to the determinants of scaleup creation identified in the finance for startups.
problems, solutions, and needs (and what might not be working
article above.
very well) in a given area from a firsthand perspective.
“
Funding Gap: Total Early-Stage Funding in Frankfurt is below
I think the Early-Stage funding land- Frankfurt has an Early-Stage Funding Shortfall
Activation Phase Average
scape in the Frankfurt Rhine-Main In the last three years, the amount of early-stage funding invest-
1200
ed in Frankfurt startups has grown very rapidly—twice as fast as
region should be improved to attract
Early-Stage Funding in USD millions

1014
the global median across all ecosystems, and one of the highest 1000
more start-ups from abroad. Unlike growth rates in the world. This is encouraging: it means more in- 800
vestors recognize the potential for growth in Frankfurt, boosted
other major cities such as Berlin, by the emergence of promising startups like those we have high-
600
624
487
Munich and Hamburg, Frankfurt does lighted in this report. 400
not yet have a very active regional Ear- 200

222 198
Despite that rapid growth in early-stage funding and the fact that 65 84 Activation Phase
ly-Stage Fund that could invest more

Average: 77
0
many Frankfurt startups are bootstrapped, however, Frankfurt
n
am
na
ia
ris
rt
i
liberally than VCs would. The busi-
nk
rli
on
fu
faces a gap in total early-stage funding. At $65 million in total ear-
Pa
o
d
Be
lsi
el
nk
t
er
Es
rc
He
a
st
Ba
Fr
Am
ly-stage funding over the period studied here, Frankfurt’s amount
ness-angel scenes in Frankfurt is well is 16% lower than the Activation phase average. For comparison,
developed and VCs with national focus the average at Globalization is nearly $400 million. While this gap is Interestingly, the median size of Seed and Series A funding rounds
normal for the Activation phase, Frankfurt will need more funding is fairly high, at $0.55 and $4.2 million, respectively (see chart).
fund more developed companies but
as its Output grows. This is likely to change, however. As Startup Output grows and,
the startup scene would benefit from a presumably, as the amount of early-stage funding increases, too,
local player in the Early-Stage space. As more startups are created in the region, early-stage funding the investment orientation of the ecosystem will need to shift. The
will have to continue to grow rapidly to keep pace. This will be a focus should be on more funding deals rather than large round
Ingo Franz challenge for the ecosystem as the amount of early-stage funding sizes.
Business Angel and Partner of Kreaxi Ventures has already risen; it will need to keep growing at a fairly fast rate.

Find us on:
33
“
Global Ambition and It’s a German challenge, not just a
Median Round Size in USD millions Global Market Reach
Seed Median Amount ($ M) Frankfurt challenge. When a company
Series A Median Amount ($ M) In general, scaleup
needs $10 million and it has not
6
Median Round Size in USD millions
5.3
5
5 firms sell more to global
4
4.2
3.91 3.91
4.5 4.37
markets, in part because broken even yet, we’re at a critical
the founders of scaleup
3.21
moment. Such capital risk is typically
3
firms are more global-
2
1.6
ly connected and have too big for angel investors, so who is
1
0.55 0.55 0.45
0.67 0.77 0.67 0.62 0.58
1.12
higher ambitions. funding these firms? There’s an
0
Frankfurt Amsterdam Barcelona Helsinki Toronto Paris London Stockholm Berlin Global Connectedness unfortunate gap.
signifies the cross-border
Carlo Kölzer
Frankfurt Needs to Increase Global Connectedness if it Wants to Grow relationships that are key
Founding Partner & CEO at 360T
and Eventually Reach Globalization Phase channels for knowledge sharing and the exchange of assistance
Lower Level of Global Connectedness than Peer Ecosystems
between founders. Particularly important are connections that

12
founders in an ecosystem like Frankfurt have to founders in the
Avg. # of Connections per Founder to
10.1
10 9.6
world’s top seven ecosystems: Silicon Valley, London, New York On average, Frankfurt startups have only 17% of their customers
8.6 8.6
Berlin, Singapore, Tel Aviv, and Shanghai. It helps increase Global outside Europe (see chart).
Top Ecosystems
6 5.8
6.4
Activation Phase
Market Reach which, as shown above, leads to faster startup
Average: 5.5
growth. Frankfurt founders currently have a level of Global Con- In many ways, it is a blessing for Frankfurt startups to be in the
4
nectedness that is roughly in line with the Globalization phase middle of a large integrated market (the European Union), and
2
average. in a region that draws headquarters and subsidiaries of multi-
0 national companies, which are potential customers. This market
Frankfurt Amsterdam Barcelona Estonia Helsinki Lisbon
This relatively modest level of Global Connectedness is in spite access could also reduce the incentive to look beyond European
of the connections that Frankfurt founders say they are making borders for customers, limiting potential growth and success in
Global Connectedness quantifies meaningful relationships that exist both locally and through international travel. the long term.
between startup leaders and how they were developed. We focus
especially on connections with the world’s top ecosystems. Global These local meetings and international trips, however, have not This is reflected in the lower levels of global ambition among
Connectedness brings Global Know-How into an ecosystem and translated into a higher level of Global Connectedness for the eco- Frankfurt founders—recall that founders of scaleup firms have
leads to greater Global Market Reach. system. This has helped hold down Global Market Reach among higher levels of ambition than non-scaleup founders. Founders
Frankfurt startups—another key characteristic of scaleup firms. of firms that become scaleups seek to go-global right from the

Find us on:
34
“
The Success Factor of Global Connectedness includes four
The typical route for a German startup
Frankfurt Founders Say They Make Global Connections Locally and Through Travel - But
Not Building Enough Global Connectedness
Frankfurt
variables: (1) Average number of relationships that found- is to first expand to German-speak-
ers in an ecosystem have with founder in top 7 global
18 Activation Phase Average
ing Europe, meaning Switzerland and
16 15.33 ecosystems— this is the most significant and predictive
14
variable; (2) Number of global startup leaders that found- Austria. In my experience, you have
Number & Percentage
12
10
ers in each ecosystem have met locally; (3) Percentage to be capitalized enough to go to the
8
of founders around the world that report a meaningful
U.S., because it has a highly compet-
8
6 5.77 5.49
4.49 relationship with founders in a given ecosystem; (4) Per-
4
itive market and talent there is more

4 3
2
2 centage of founders in ecosystem who have traveled to
top 7 global ecosystems: Silicon Valley, New York, London,
0
# Relationship with Founders # Global Startup Leaders that % Entrepreneurs Elsewhere with % Local Founders Who've
expensive. That means that, as a Euro-
in Top Ecosystems Founders have met locally Relationships to Ecosystem Traveled to Top Ecosystems Singapore, Shanghai, Tel Aviv, and Berlin
pean company, you have to be overly
capitalized in order to successfully
beginning. In Frankfurt, however, founders express lower levels
Frankfurt Startups Mainly Sell to Customers in Europe
Making resulting in Low Global Market Reach of global ambition. This will limit the creation of scaleups in the
enter the United States. If not, you’re
Comparison of the Ability of Startups to Go Global
ecosystem. just bringing a knife to a gunfight.
That’s why companies fail. I’ve seen so
Percentage of foreign customers outside
40% 37%
35% The Frankfurt region has a high population of immigrants, some-

many fail particularly when the indus-
of the ecosystem's continent
30%
30% 28% thing else that is associated with scaleup firms. Despite a high level
25% 24%
21% 22%
of diversity, with 51 percent of the region’s population having an try is marketing heavy.
20% 19% immigrant background, only 9% of tech founders in our sample
15%
15% are immigrants. This rate is significantly lower than both the global Carlo Kölzer
13%
10% 12%
median and average among other Activation phase ecosystems. Founding Partner & CEO at 360T
10%
5%
The gap between Frankfurt’s high density of immigrants and their
0%
participation in the startup ecosystem is particularly striking given
m
on
n
t
ris
viv
ki
ty
ur
on
nt
rli
da
ol
the increasing share of new businesses started by immigrants

sin
Ci
nd
Pa
lA
kf
Be
ro
el
kh
er
rk
an
Lo
Te
To
rc
He
oc
st
Yo
Ba
Fr
Am
St
across Germany. The share of new businesses in the country

w
Ne
started by foreign passport holders is now at 44%, up from 13%

Find us on:
35
“
While TU Darmstadt already has a
Founders in Frankfurt have comparatively low levels of Founder Ambition as indicated by the
low percentage reporting ambition to build products for global markets large focus on entrepreneurship, we
Target Global Market First
observe that most of the students
first and develop a globally leading product
100% 100%
% of Startups that target global markets
100% Globally Leading Product

90%
80%
from Goethe University are still inter-
70%
70%
66%
59%
69%
ested in more traditional career paths
60%
50% 46%
42%
48% 49%
43% 45%
42%
51%
such as investment banking and con-
39% 40% 38% 37% 39% 38%
sulting. This could be due to the large
40% 36%
32% 34%
30%
30% 27%
23%
20%
number of big corporate players in
10%
0% the region, who market themselves
Frankfurt Amsterdam Barcelona Estonia Helsinki Lisbon Toronto Paris London Stockholm Berlin Tel Aviv New York City
favourably to graduates.. However, as
more and more senior people from
in 2003.4 This refers to all types of new companies, not just those
Frankfurt has Lower Share of Immigrant Founders than Global in technology, but the participation gap is nonetheless large. the industry decide to start companies
Median and Other Activation Phase Ecosystems
or join existing startups, as we’ve seen
50% Frankfurt’s universities draw tens of thousands of foreign students
45%
along with the international talent recruited to work at multina- with multiple ex-Goldman manag-
Share of Founders from Outside
42% 43%
40%
35% tionals with local presences. The strong support network that ers, students might begin to consider
has developed in Frankfurt—demonstrated in the high Sense of
of Germany
joining a startup right from the start.

30%
25% 23%
Community—can and should work to include more immigrants
20% 18% 17%
into the startup ecosystem. This will help grow Startup Output
Ecosystem
15% Median: 16%
15% 13%
11%
Activation Phase Ralf Heim
and raise Global Connectedness.
10% Average: 15%
10% 9%
Co-CEO at Fincite
5%
0%
Altogether, Frankfurt’s relatively low performance on these im-
on
n
to
a
ich
m
lm
ris
rt
ni
on
rli
fu
da
on
nd
Pa
ho
un
portant characteristics of scaleup creation means the ecosystem

to
Be
el
nk
er
r
Es
Lo
k
M
To
rc
oc
a
st
Ba
Fr
Am
St
is currently not well-positioned to produce scaleups at a high or

steady pace.
4 “Immigrants Are Bringing Entrepreneurial Flair to Germany.” The Economist, The

Economist
Find us on:
36
Frankfurt has not yet activated its full

Frankfurt Has a Slightly Lower Share of Experienced Engineers Frankfurt Has a Relatively High Share of Local Graduate Engineers
Talent Potential Than The Global Median
Percentage of Local Graduate Engineers

90%
90%
80% 78%
Percentage of Experienced Engineers

Frankfurt hosts a dense collection of universities but, according 80% 79% 78%
69% Ecosystem
74% 70% 68% 67% Median: 71%
72% 72% Ecosystem
to several of our metrics, the ecosystem appears to be lagging 70% 67%
63%
Median: 73%
60%
63% 64%
57%
62%
53%
in terms of fully tapping into the region’s talent. The importance 60%
50%
52%
50%
of talent for startups, of course, goes beyond the quality of local 40%
40%
institutions—as we found in the scaleup analysis, experience is 30%
30%
closely associated with the creation of scaleups. Some of Frank- 20%
20%
10%
furt’s results on talent are related to its status as an Activation 10%
0%
phase ecosystem, but also offer scope for action. 0%
n
on
m
ris
ty
on
m
t
i
nk
rli
ur
ol
Ci
da
Pa
nd
sb
Be
kf
lsi
kh
a
on
n
t
ty
rk
i
er
ur
Lo
Li
nk
on
ni
an
rli
vi
He
Ci
oc
Yo
nd
st
lA
to
kf
Be
lsi
Fr
el
St
rk
Am
an
Es
Lo
Te
ew
rc
He
Yo
Among software engineers, for example, a comparatively low
Ba
Fr
N
ew
N
share of them in Frankfurt have at least two years of prior startup
experience before joining their current startup. In larger and more Compared to Its European Peers Frankfurt Has a Relatively
Frankfurt Has an Average Share of Experienced Growth Employees Low Share of Foreign Engineers
developed ecosystems such as London, Berlin, and New York City,
around three-quarters of engineers have such prior experience— 90% 70%
in Frankfurt, only about two-thirds do. As with other dimensions

Percentage of Experienced Growth
80% 62%
Percentage of Foreign Engineers

80% 60%
of Startup Experience, this is normal for the Activation phase and 70%
64%
69%
64% 50%
54%
60% 59%
should rise over time. 60%
53%
57% 56%
Ecosystem
Median: 59%
Employees
52%
50% 40%
40% 30%
The percentage of engineers with at least 2 years of dedicated 24% 23% 24%
22% Europe
30% 19% Average: 23%
20%
experience in another startup prior to joining their current startup 20%
17%
is comparatively low in Frankfurt, at 67% compared to 72% in 10%

10%
Berlin and 79% in London. Many engineers started working for 0% 0%
on
their startup without having worked for another startup before.
rt
na
on
n
m
a
on
i
n
ty
on
m
t
nk
i
rli
on
ur
nk
fu
rli
vi
da
ol
ol
Ci
sb
a
lo
nd
sb
nd
Be
lsi
lA
kf
rd
Be
nk
kh
lsi
kh
el
e
er
rk
Li
Li
Lo
He
an
rc
Lo
rc
e
Te
He
oc
oc
st
Yo
st
Fr
Ba
It seems like a comparatively high share of engineers in Frankfurt
Ba
Fr
Am
St
St
Am
ew
N
has entered the startup world for the first time with their current
jobs.

Find us on:
37
Just as with the low share of immigrant founders in Frankfurt, trails other ecosystems in the Activation phase. Given Frankfurt’s
Frankfurt has Lower Share of Female Founders than Global Median
and Other European Ecosystems there is a relatively low share of foreign-born engineers working existing strengths and assets—both in the regional economy and
20%
in startups. startup ecosystem—these gaps are addressable by leaders and
19%
18% stakeholders. We now turn to what actions can and should be
Percentage of Female Founders
Average North
16% America: 17%
16%
14% 14%
15%
Ecosystem Frankfurt trails other European ecosystems by only a few percent- taken to boost ecosystem growth.
14% 13%
Median: 14%
12%
Average
Europe: 13% age points on this metric. Yet, considering the free movement of
10% 10%
10%
8%
labor within Europe, and the high quality of Frankfurt universities,
8%
6%
there appears to be considerable room for growth in attracting
4% outside talent into the ecosystem. Frankfurt’s universities attract
2%
0%
many international students, roughly 230,000 all across the region.
They should be better connected and integrated into the startup
m
ris
on
lin
t
ty
i
ur
nk
on
ni
da
Ci
r
Pa
nd
to
kf
Be
lsi
el
er
rk
an
Es
ecosystem.
Lo
rc
He
st
Yo
Ba
Fr
Am
ew
N
Frankfurt fares somewhat better in the share of growth employees A final indication of the remaining untapped talent potential in
(those working in customer acquisition) who have prior startup ex- the Frankfurt ecosystem is the share of founders that are female,
perience. The ecosystem is roughly in line with the global median. which is comparatively low (see chart).
This potentially indicates that, at least compared to other ecosys- Connecting more women to the startup ecosystem and increasing
tems, Startup Experience is slightly more prevalent among those their participation will help drive an increase in startup creation,
with a business background rather than a technical background. boosting further growth in the ecosystem.
Most of this technical talent, moreover, appears to come from the
local region. A fairly high share of engineers working in Frankfurt
startups graduated from local universities. Summary: Gaps in Frankfurt Startup Ecosystem
This is roughly in line with the Activation phase average but, as The gaps in Frankfurt’s startup ecosystem relate to the global
shown in the comparison with other ecosystems, the share of orientation of the ecosystem and experience levels. These are
talent from local sources declines over time as ecosystems grow normal for an Activation phase ecosystem, but on several key mea-
larger. This reflects the strength of Frankfurt’s universities, but also sures, including those that relate to scaleup creation, Frankfurt
the relatively low attraction of the ecosystem for foreign talent.

Find us on:
38
Key Findings and Policy Directions

The overall objective for the Frankfurt ecosystem is the A. Increasing Startup Output in
creation of more startups: over the next several years, Low Startup Density in Frankfurt Shows
Startup Output should triple, just as the regional Master- Frankfurt Large Potential for Growth
plan envisions. The second major objective is to address 0.7

0.66
Thousand Startups / Million People

those gaps in the ecosystem that relate to scaleup cre- Frankfurt needs more startups. Even with hundreds of startups 0.6
already active across the region, Startup Density in Frankfurt is
ation, especially those regarding Global Connectedness. 0.5
quite low. This measure, which looks at how many startups there
Finally, the third objective is to further leverage existing 0.4 0.39
are relative to a region’s population, is nearly five times lower in 0.34 0.33
strengths for scaleup creation. 0.3
0.30
Frankfurt than the average across other Activation phase ecosys-
0.2
tems (see chart). This demonstrates that there is considerable
0.18
room for growth in Frankfurt’s Startup Output, particularly from 0.1

0.06
local sources. 0
on
rt
iv
ty
i
nk
on
rli
Av
fu
Ci
nd
Be
lsi
el
nk
k
l
Lo
Te
rc
He
r
a
Yo
Ba
Fr
In Frankfurt, hundreds of new startups will come principally from
ew
N
activating local talent, especially in universities and large corpo-
rations. Additionally, closing the funding gap in Frankfurt will help
number of entrepreneurship programs they offer to students.
widen the funnel of startups..
This is a common story across the world, as universities seek to
not only produce entrepreneurs but also prepare their students
to work in startup companies. In Startup Genome’s conversations
Activating Talent through University Entrepre-
with leaders in this space across the world, we have identified
neurship Programs three key principles that characterize successful university en-
trepreneurship programs. Unfortunately, many universities have
There are tens of thousands of university students in the Frankfurt yet to grasp these—there is a clear opportunity for Frankfurt to
region, and its world-class universities have been increasing the become a world leader on this front.

Find us on:
39
“
What has improved in recent years in ●● Experience. Universities should open more opportunities for ers gain experience in a corporate setting prior to their startup
students to gain work experience in startups. At the University journey. The presence of so many large corporations in Frankfurt
the Frankfurt Rhein-Main university of Waterloo’s Co-Op Program, for example, students can work is thus a strong foundation for startup growth. Yet programs need
landscape is a willingness to cooper- for up to two years (paid) in tech companies and startups, and to be oriented that way and corporations need to recognize this
the university maintains a strong network of such opportuni- dimension of their role in the ecosystem.
ate. Different universities and their re-
ties. This not only builds experience among students but also
spective startup and innovation units creates a pipeline of talent for local companies. ●● Beyond Acquisitions. Corporations need to see that involve-
are willing to work together in order to ●● Education. Universities should integrate concepts of entrepre- ment in the startup community is not just about building a
potential acquisition pipeline or outsourcing innovation or
raise awareness about entrepreneur- neurship into existing degree programs, not spend resources
building goodwill. The strategic partnerships that result from
creating new courses of study specifically on entrepreneur-
ship. Most students who are interest- ship. An engineering graduate who has been exposed to corporate-startup collaboration are, of course, important. But
corporate involvement in the ecosystem needs to go beyond
ed in starting companies come from entrepreneurship and given experience with startups, is far
more likely to become a founder working with existing startups.
a business background, yet we need
than a graduate with a degree in
more interdisciplinary founding teams. entrepreneurship.
So we are working on connecting stu-
Activating Talent from Large
dents from different departments with
Corporations
each other.
It is rather common for stakeholders in
Katharina Funke-Braun
Managing Director at Goethe Unibator any startup ecosystem to bemoan the
attractiveness of corporate jobs, es-
pecially among students and younger
●● Exposure. Most students, at any university, are unaware
workers. But this is not a drawback.
of startups as a viable career option. Universities, perhaps
Across the world, the average age of
through programs such as Blackstone LaunchPad, should
founders of fast-growing firms is right
seek to broaden students’ horizons in terms of how they think
around 40 years of age. Popular stories
about their careers. Even if taking a large corporate job follow-
of wunderkind twenty-something
ing graduation makes the most sense, these young workers
founders have skewed the percep-
should approach that experience as preparing them to do a Talent Night, Credit: TechQuartier
tion of reality: most successful found-
startup later on.

Find us on:
40
●● Open Innovation—and Boundaries. As part of their interac- ●● Support Angel Community. There is only one angel group,
B. Increase Global Connectedness
tion with startups, many corporations open up their research Business Angels FrankfurtRheinMain, with 100 affiliated in-
portfolios to encourage startups to take and commercialize vestors. In Europe and North America, the Angel Resource and Global Market Reach
certain ideas. Such openness can also extend to corporate Institute estimates there is, on average, 1 registered angel
employees, who are a main source of future founders and investor per 10,000 people. In Frankfurt, based on population The Frankfurt startup ecosystem needs to be more globalized: this
startup employees. In Frankfurt, there still appears to be a gap and the estimated number of angels, that ratio is closer to will help raise the level of quality and ambition among startups,
in terms of corporate employees leaving those jobs to create 1 per 38,000. The region has no shortage of high net worth and help catalyze faster growth and more scaleups. Frankfurt
startups. This is reflected in the relatively young founding age individuals, though many prefer not to disclose their invest- founders, in our analysis, say that they meet founders from top
of Frankfurt founders, and the low level of experience in large ment activities or participate in structured investing. This may ecosystems locally and by traveling to those places. This has result-
tech companies that Frankfurt founders have. be understandable, but it can leave founders disconnected, ed in a level of Global Connectedness among Frankfurt founders
reducing access to funding. Formation of more angel groups that, for an Activation phase ecosystem, is fairly good. But, there
Increase Early-Stage Funding: Support Angel should be encouraged, respecting privacy but with the shared is ample room for growth, especially given Frankfurt’s position as
goal of increasing funding overall—investments made through a global financial center. This can be done by leveraging corpo-
Community and Drive International Funding rate and university assets, and broadening the participation of
angel groups, moreover, have been shown to be higher quality
Sources than those made individually. This will improve returns for all immigrants in the ecosystem.
angels.
Funding needs evolve over the course of the Ecosystem Lifecycle.
●● Attract International Funding Sources. International inves-
In the earliest stages, rapidly injecting capital into the ecosystem is Increase Global Market Reach with Ambition and
tors, especially from top ecosystems, bring expertise, networks,
needed to help funding availability and accessibility keep pace with Know-How
and experience. As Frankfurt activates more local funding
growth in Startup Output. This is precisely what has occurred in
through angel groups, mechanisms should be created to invite
Frankfurt as the ecosystem has grown to include several hundred The Global Connectedness of Frankfurt startups has not translat-
international investors to participate. At OMERS Ventures, the
startups in just a few years. Output growth was accompanied by ed into high Global Market Reach, in part because founders do
venture investment arm of the Ontario Municipal Employees
early-stage funding growth, with Frankfurt posting one of the five not think globally from their earliest stages. Ecosystem leaders in
Retirement System, a dedicated effort is made to attract in-
fastest growth rates in the world over the past few years. Frankfurt need to focus on raising the sights of founders, exposing
ternational investors at the Series B stage. Because regional
startups have to look outside Ontario at that stage anyway, them to global know-how so they can orient their ambitions to
Now, Frankfurt needs more. Even after rapid growth, total ear- global markets.
says CEO John Ruffolo, OMERS Ventures will put in half of a
ly-stage funding in Frankfurt still lags behind the Activation phase
Series B round and seek the other half from an internation-
average by 16 percent. As Startup Output triples in the next ●● Create an International Startup Event. Helsinki is not much
al venture capital firm. This maintains connections with top
several years, early-stage funding will need to continue to increase larger than Frankfurt in terms of Startup Output, but has pro-
ecosystems but can also allow promising startups to remain
both through the regional angel community and by bringing in gressed to the early Globalization phase of the Ecosystem
in their home ecosystem.
investment from abroad. This is particularly true at the Series A Lifecycle. Helsinki startups have high Global Connectedness
and B stages.

Find us on:
41
(twice as high as Frankfurt) which has led to high Global Market ●● Expand Inclusion and Branding of Events. In many regions,
C. Build on Existing Strengths to
Reach. In part, this is due to a major startup event, Slush, which immigrants form close-knit networks that help them acclimate
not only brings thousands of founders and others to Helsinki and succeed in their new homes. In many startup ecosystems, Create Scaleups
every year but also exposes local founders to the global in- however, these networks do not necessarily overlap with exist-
novation frontier. Frankfurt hosts several international fairs, ing local networks of founders, investors, and other stakehold- Frankfurt is a leading global financial center, and hosts the densest
which may bring entrepreneurs from elsewhere, but none of ers. Often, immigrant communities are not aware of certain collection of Fintech startups, even compared to other financial
these events are specifically startup events. Creating such an activities. Careful attention should be paid to how events and centers such as London and New York City. Yet more action is
event—with an express objective to bring more global know- programs are promoted to ensure that both immigrants and needed in Frankfurt to build on success in Fintech and, especial-
how and ambition to the Frankfurt ecosystem—may help native-born residents come together and connect with each ly, create more scaleup firms. Additional programs that extend
increase Global Market Reach. other. Events should be promoted in such a way to overcome corporate engagement can leverage Frankfurt’s other sub-sector
language barriers. strengths.
Integrate More Immigrants into Startup Ecosys- ●● Activate Entrepreneurial Potential of Refugees. Germany
tem and the Frankfurt Rhein-Main region have recently seen a high
Creating More Fintech Scaleups
influx of refugees, who bring talent, experience, and drive.
The Frankfurt region hosts a very large population of first- and Several cities, as highlighted by a Centre for Entrepreneurs
According to our global analysis across 12 sub-sectors and 96
second-generation immigrants. In most countries, Germany in- (CFE) report, have seen the creation of new organizations
cities, Fintech is in the mature phase of the lifecycle of sub-sector
cluded, immigrants have a high entrepreneurial propensity. Yet dedicated to helping refugee entrepreneurs, including Singa
evolution. Compared to sub-sectors such as Artificial Intelligence
their ability to participate in startup ecosystems varies: in Frank- Business Lab in Berlin.1 These “models” should be looked at
and Advanced Manufacturing & Robotics, growth in startup forma-
furt, there is a gap between the overall immigrant population and for Frankfurt, and the CFE report also recommends efforts to
tion and funding and exits in Fintech is slowing. With such a high
the share of startup founders that are immigrants. expand financial inclusion and map the skills of refugees.
number of Fintech startups in Frankfurt, the focus now should be
on addressing regulatory challenges, collaboration with incum-
●● Connect Foreign Students. At Frankfurt’s regional universi- bent firms, and creating more scaleups. This, for example, is what
ties, more than 32,000 students have a foreign passport. These Tech Nation (formerly Tech City UK) is doing with the formation of
students should be better connected to entrepreneurship its FinTech Delivery Panel, which brings together 24 experts from
programs on campus and startup work experiences that get different parts of the finance industry. In Frankfurt, a similar sort
them fully integrated into the ecosystem. Such efforts should of effort may be called for to sustain Fintech’s growth.
also seek to help those students connect to startups and
founders in their homes countries, to help the individuals and
expand Frankfurt’s global network. 1 “Starting Afresh: How entrepreneurship is transforming the lives of resettled
refugees,” Centre for Entrepreneurs, March 2018, at https://centreforentre-
preneurs.org/cfe-research/starting-afresh-how-entrepreneurship-is-transfor-
ming-the-lives-of-resettled-refugees/.

Find us on:
42
Programs Focused on Scaleups
Frankfurt has several programs that focus on helping new start-

ups, but is currently bereft of a program dedicated to helping
generate more scaleups. One leading example of this type of
program is the Lazaridis Scale-Up Program at the Lazaridis In-
stitute for the Management of Technology Enterprises at Wilfrid
Laurier University. Located in the heart of the Toronto-Waterloo
Region Tech Corridor, the program selects 10 high-potential
technology companies in Canada for an annual cohort called the
Lazaridis10. Companies are matched with functional specialists in
specific industries and global business leaders lead group learn-
ing modules. In Frankfurt, a scaleup program like this could help
empower local companies, connect them to relevant expertise,
and bring in additional global resources.
New Forms of Corporate Engagement
The Frankfurt region is rich with multinational corporations, many

operating a variety of engagement models with the startup com-
munity. The challenge is in sustaining that community, providing
a growing pool of quality startups that corporations can engage.
One innovative approach to this challenge is the methodology
underpinning the BridgeCommunity program. Non-competing
corporations pool resources and technology interests behind
one startup commercialization program, which recruits cohorts of
10-15 startups. The program is a business-need driven startup en-
gagement model, linked with a targeted entrepreneurial outreach
initiative in the local community that encourages the formation of
future startups program members can leverage.

Find us on:
43
Acknowledgment and Partners

A project like the Frankfurt Startup Ecosystem Report can only be
Authors Matthias Ivantsits, Software Engineering and Data Science
realized with an enormous effort from both the project team and Christopher Raic, Data Acquisition and Analysis
external supporters. Several partners have invested significant re-
Marc Penzel, Founder and COO, Startup Genome Julius Fuhrmann, Data Acquisition and Analysis
sources into the project. Numerous advisors, founders, investors,
and industry experts have given us access to their knowledge, Dane Stangler, Chief Policy Officer, Startup Genome Anand Niranjan, Data Analyst
networks, and time because they support our vision and wanted JF Gauthier, Founder and CEO, Startup Genome Pranav Arya, Manager, Research
to move their ecosystem and the whole startup sector forward. Arnobio Morelix, Senior Fellow, Startup Genome Joan Listle, Business Development Manager
Tilman Wiewinner, Research Manager, Startup Genome Parshant Sharma, Data Acquisition
This section is meant to express our deep gratitude and appre-
ciation towards anyone who made a contribution to make this Sama Siddiqui, Business Analyst
project possible. Project Team Miroslav Zhelezov, Survey Outreach
Dinika Govender, Content and PR Manager
Startup Genome Michelle Jones, Accountant

Karan Singal, India Operations
JF Gauthier, Chief Executive Officer Felix Noller, Design
Dane Stangler, Chief Policy Officer Kritivity Web Solutions, Design Support
Marc Penzel, Chief Operating Officer Alicia Robb, Survey Consultant Expert
Arnobio Morelix, Director of Research Silverstroke Communications, Web Development
Tilman Wiewinner, Research Manager Max Marmer
Simon Senkl, Director, Software Engineering and Data Science Michelle Jones
Rahul Chatterjee, Director, Operations Kanika Singal
Lubin Arora, Senior Manager, Research

Find us on:
44
TechQuartier ●● Katharina Funke-Braun, Managing Director, Goethe Unibator Orb Intelligence: Business Information for B2B Marketing and
●● Ralf Heim, Co-CEO, Fincite Sales. Orb provides company information and smart algorithms
Dr. Sebastian Schäfer - Managing Director as a service to marketing software vendors and B2B agencies.
●● Philipp Kaiser, Managing Director, Helaba Digital
Dr. Thomas Funke - Co-Director ●● Carlo Kölzer, Founding Partner and CEO, 360T Angel Resource Institute provides education, training, men-
Dominik H. Zborek - Research Manager toring, and information on best practices in the field of angel
●● Matthias Lais, Founder Director at Main Incubator
investing to improve connections between angel investors and
Hugo Paquin - Marketing Manager ●● Simon Nörtersheuser, Co-Founder and Managing Director, entrepreneurs.
Alina Kilian - Working Student Policen Direkt Group
Tech Nation (formerly Tech City UK) empowers ambitious
●● Hong Wa Poon, Manager, Merck Accelerator
tech entrepreneurs through growth programmes, digital en-
●● Sebastian Schäfer, Managing Director, TechQuartier trepreneurship skills, a visa scheme for exceptional talent and
Survey Participants and Interviewees Thank you for your support! by championing the UK digital sector through data, stories and
media campaigns.
Thanks to the more than 10,000 survey participants and the
approximately 275 interviewees—startup founders, investors, QCC: The QCC Conference is a two-day annual event, alternat-
leaders of accelerators, incubators and startup hubs, and pol- Partners and Collaborators ing between Quebec City and Toronto, that supports the devel-
icy-makers—all over the world who trusted us by sharing their opment of a buoyant private market investment ecosystem, in
confidential information and expert knowledge with us. By pro- Canada and internationally.
viding us with solid quantitative data and insights, they created Global Partners
Fingerprint for Success studies attitudes and motivations of
the basis and the heart of our research.
entrepreneurs to learn what separates them from the rest of
Global Entrepreneurship Network (GEN): Operates pro-
the population and help entrepreneurs and business owners
In particular, we would like to thank the interviewees who were grams in 170 countries that foster cross border collaboration
succeed.
kind enough to share their insights about the Frankfurt ecosystem between entrepreneurs, investors, researchers, policymakers,
specifically: and entrepreneurial support organizations to fuel healthier
start and scale ecosystems. Startup Genome Consensus
●● Stephan Bredt, Department Head, State Government of Hesse
CrunchBase: Everyday investors, journalists, founders, and the Network Members
●● Ingo Franz, Co-founding Partner, Creathor Ventures global business community turn to CrunchBase for information
●● Thomas Funke, Co Director, TechQuartier on startups and the people behind them.
Amsterdam, Netherlands
Dealroom.co provides data-driven intelligence on high-growth Startup Delta
companies.
Ministry of Economic Affairs and Climate Policy

Find us on:
45
Atlanta, United States Istanbul, Turkey Montreal, Canada Phoenix, United States
Metro Atlanta Chamber Endeavor Turkey Centech Startup AZ Foundation
The Union of Chambers and Commodity Ex- Real Investment Management Arizona State University
Bahrain
changes of Turkey (TOBB) Ville de Montreal Arizona Commerce Authority
Tamkeen
Turkish Exporters Assembly (TIM) Arizona Technology Council
Munich, Germany
Barcelona, Spain Habitat Association Invest Southwest
City of Munich
Catalonia Trade & Investment Partnership for Economic Innovation
Jerusalem, Israel IHK for Munich and Bavaria
Edmonton, Canada Jnext Invest in Bavaria Quebec City, Canada
Edmonton Economic Development Corporation LMU Entrepreneurship Center Quebec International
Kuala Lumpur, Malaysia
MaGIC Munich Startup
Frankfurt, Germany Singapore
Unternehmertum
TechQuartier Enterprise Singapore
London, United Kingdom
Strascheg Center for Entrepreneurship
Helsinki, Finland Tech Nation (formerly Tech City UK) Sydney, Australia
New York City, United States
Helsinki Business Hub StartupAUS
Malta
New York City Economic Development
Malta Communications Authority University of Technology Sydney
Hong Kong Corporation
TechSydney
Invest Hong Kong Tech:NYC
Manila, Philippines
Cyberport Taipei City, Taiwan
Department of Trade and Industry
New Zealand
HKSTP Business Next
Melbourne, Australia NZ Angel Association
Houston, United States Tampa Bay / Hillsborough County, United
LaunchVic
Ontario, Canada States
Houston Exponential
Government of Ontario Tampa Bay Wave
Ottawa, Canada Hillsborough County Economic Development
Invest Ottawa University of South Florida (USF)

46
Tel Aviv, Israel Enterprise Growth Institute Techstars Austin Ysios Capital
Tel Aviv Global Entrepreneurs Organization (EO) Capital Factory Caixa Capital Risc
Flashpoint Nauta Capital
Toronto-Waterloo, Canada Bahrain
FlatironCity Alta Life Sciences
MaRS Discovery District Economic Development Board
Hypepotamus ESADE BAN
Communitech Corporation Bahrain Development Bank
IgniteHQ Capital Cell
Vancouver, Canada Invest Atlanta Bangalore, India Delvy Law & Finance
Vancouver Economic Commission LaunchPad2x 91springboard
Beijing, China
BC Tech Association Prototype Prime Kyron Global
91Maker
Sandbox ATL Microsoft Ventures
Creativeyoungcommunity
Startup Atlanta Global Incubation Services
Ecosystem Partners Microsoft
Cyzone Innoway BJ
TechSquare Labs
Makesglobal
Ecosystems by alphabetical order Techstars Atlanta Tlabs
Noodle&Meetup
TiE Atlanta Nasscom
Startup Grind
Amsterdam, Netherlands The India Network
Austin, United States Suhehui
Health Holland Barcelona, Spain
3 Day Startup Technode
Holland Fintech Antai Venture Builder
Tech Ranch
StartLife Berlin, Germany
Austin Technology Incubator BCN Tech City
Senate Department for Economics, Energy
Atlanta, United States University of Texas Austin Conector
and Public Enterprises,
Advanced Technology Development Center BuiltIN Inveready
Hasso Plattner Ventures
(ATDC) Central Texas Angel Network Nekko Capital
HIIG
Atlanta Tech Village St. Edward’s University Rousaud Costas Duran
The Factory
Engage WeWork Sabadell Ventures
NKF Media
SeedRocket

Find us on:
47
Project A Ventures New England VC Association TU Darmstadt Hong Kong

Rocket Internet Workbar Deutsche Bank StartUps HK
St. Oberholz Merck Hong Kong Fintech
Chicago, United States
Microsoft Ventures Commerzbank brinc
Catapult Chicago
Berliner Startup Stipendium KPMG WHub
University of Chicago
Get Started by Bitkom RheinMain Startups Metta
Matter Chicago
RCKT Deutsche Börse Group The Hong Kong Polytechnic University
mHUB
RKW IHK Frankfurt
The Shift Chicago Houston, United States
Accelerator Frankfurt
Boston, United States 1871 Houston Angel Network
WIBank
4GenNow WorldChicago Rice University - McNair Center for
Startzero Entrepreneurship
Cambridge Innovation Center
Edmonton, Canada Hessen Trade & Invest
Capitalnetwork Rice University - Rice Alliance for
Edmonton Research Park Frankfurt RheinMain
Carlton PR marketing Entrepreneurship
TEC Edmonton Candylabs
Health Innovators Unconventional Capital
Startup Edmonton Hessian Ministry of Economics
Mass Challenge Circular Board
Get Started by Bitkom
TechStars Frankfurt, Germany Redlabs
RKW
Greentownlabs ING-DiBa Mercury Fund
Cybersecurity Factory EY Helsinki, Finland Fannin Innovation Studio
City of Boston Frankfurt Economic Development Nestholma University of Houston - Hatch Pitch
Boston New Technology blackprint Booster Arctic Startup Rice University - Owl Spark
LearnLaunch Provadis Hochschule Espoo Innovation Garden Houston Technology Center
StartHub.Org DZ-Bank Gruppe NewCo Helsinki Station Houston
DCU FinTech Innovation Center Goethe University Frankfurt FVCA TMCx
Gründerküche Tekes JLaBS

Find us on:
48
Jerusalem, Israel Balderton Capital Melbourne, Australia Munich, Germany

BioJerusalem Wayra London BioMelbourne Network 48forward
Startup Nation Central Accelerator Network Inspire9 ammersee Denkerhaus
Jumpspeed City of London York Butter Factory AZO Anwendungszentrum
Siftech KPMG Runway Geelong Bavarian State Ministry of Economic Affairs,
Masschallenge Jerusalem TechUK Startup Bootcamp Energy and Technology
Made in JLM GSMA ACMIX BayStartUp
Bizmax Level39 Rome2Rio Bayern Kapital
Ourcrowd Tech London Advocates Startup Victoria BioM
HUstart GEN Bits & Pretzels
Montreal, Canada
AtoBe Microsoft Ventures brigk
Notman
JVP Northzone Burda Bootcamp
Arche Innovation
VLX Microsoft for Startups CDTM
District 3
CM Equity
Kuala Lumpur, Malaysia Los Angeles, United States Startup Fest
DLD
1337 Ventures Bixel Exchange Capital Intelligent
Early Bird
Codearmy Cross Campus PME MTL
Extorel
MAD Incubator Mucker Capital Innocité MTL
Fraunhofer Venture
Maybank Bixel Réseau Capital
Gate
Malaysia Digital Economy Corporation WeWork Montréal Inc
German Entrepreneurship GmbH
500 Startups Mtl Newtech
Manila, Philippines HV Holtzbrinck Ventures
HEC
London, United Kingdom 1000 Angels HWK
Mtl Lab
MassChallenge Brainsparks Impact Hub
Quartier de l’innovation (QI)
Techstars London QBO IZB

Find us on:
49
Ludwig Bölkow Campus NationSwell BizDojo Phoenix, United States

Make Munich Quake Capital Tin Network AZ Founders Fund
Max Planck Institute for Innovation and Rubicon VC GD1 Canal Partners
Competition Runway VC Flying Kiwi Angels Center for Entrepreneurial Innovation
MCBW Sandbox Coplex
Ottawa, Canada
Media Lab TechHubNYC Co+Hoots
Capital Angels
MTZ Flinn Foundation
New Zealand Entrepreneurship Algonquin
Munich Network Galvanize Phoenix
Angel HQ La Cite College
MUST Greg Head/Scaling Point
Lightning Lab Lead To Win
next47 Moonshot
VentureCenter Startup Garage
Social Entrepreneurship Akademie MRTNZ Ventures
Enterprise Angels Kanata North BIA
Startup Alm Seed Spot Phoenix
Callaghan Innovation L-Spark
Stellwerk 18 Tallwave Capital
Sprout Accelerator ID Gatineau
Target Partners
StartupWeekend Quebec City, Canada
UN World Food Programme Accelerator Paris, France
NZX BDC
W1 Balderton Capital
New Zealand Trade and Enterprise PwC Quebec
Wayra Hello Tomorrow
CreativeHQ ROBIC
Werk1 La French Tech
IceHouse VETIQ
Mairie Paris
New York City, United States Astrolab Ville de Quebec
Paris & Co,
Digital.NYC WNT Ventures Association Québecoise des Technologies(AQT)
Le CENTQUATRE-PARIS
Flight VC NZ Venture Investment Fund
France Digitale Seattle, United States
General Assembly Equitise
The Family Startup Seattle
Gust Snowball Effect
Cap Digital ARI
Beeleev
Find us on:
50
Lighter Capital Silicon Valley, United States SISP USF (Entrepreneurship Center, Muma College
New Tech Northwest Startup Genome & Partners SUP46 of Business, CONNECT)
Techstars Crunchbase Stockholm Business Region University of Tampa

Fledge Engine Stockholm Chamber of Commerce
Tel Aviv, Israel
Microsoft Ventures StartOut Stockholm School of Entrepreneurship
Microsoft for Startups
Seattle Angel Conference Stanford Latino Entrepreneurship Initiative
Tampa Bay, United States Geektime
Alliance of Angels Computer History Museum
1Million Cups St. Petersburg & Tampa SOSA
Startup Grind LaunchPad
Entrepreneurial Collaborative Center Microsoft Ventures
Seven Peaks Ventures GSV
Greater Tampa Chamber of Commerce / Mi- Startup Nation Central
Angel Resource Institute Rocketspace nority Business Accelerator
Microsoft for Startups Parisoma Toronto, Canada
Hillsborough Community College
SURF Incubator Manos Accelerator Centre for Social Innovation
Innovation Place Invest Toronto
SVCIP.com
Shanghai, China
Stanford Lakeland Catapult Next 36
ChinaAccelerator
Pasco County SmartStart OneEleven
Ether Capital Singapore
DMZ
Innoclub 500 Startups SparkGrowth/Station2Innovation
City of Toronto
Innospace+ ACE St. Petersburg Chamber of Commerce /
World Canada
NakedHub Trendlines Medical Singapore Greenhouse
Brookfield Institute
People Square Tampa Bay Startup Week/Weekend
Stockholm, Sweden The Founder City Project
Startup Grind
Balderton Capital Tampa BaTech Venture Lab
technode
Business Sweden TEC Garage RIC Centre
Xnode
Impact Hub Innovation Factory
Northzone Haltech
Creative Destruction Lab
Find us on:
51
Vancouver, Canada Startup Package Partners

Launch Academy
Sauder S3i To reward participants of our online survey, multiple great com-
panies agreed to offer huge discounts on their product:
entrepreneurship@UBC
Creative Destruction Lab West Mixpanel’s mission is to help the world learn from its data. It
HighlineBETA tracks user interactions with web and mobile applications and
provides tools for targeted communication with them.
RADIUS SFU
SFU Venture Labs Gusto’s mission is to create a world where work empowers a
SFU Innovates better life. By making the most complicated business tasks simple
and personal, Gusto is re-imagining payroll, benefits and HR for
Wavefront
modern companies..
Spring
New Ventures BC ChargeBee is a PCI Level 1 certified recurring billing platform for
Small Business BC subscription based SaaS and eCommerce businesses. It handles
all your crucial workflows from lead to ledger with power packed
Foresight
integrations that include Salesforce, Xero, Quickbooks, Avalara,
Lifesciences BC Slack, among others.
Bio Enterprise BC/Can
ZipRecruiter provides a platform to hire and get hired. They have
helped over 1 million businesses and 100 million job seekers find
their next perfect match through partnerships with the best job
boards on the web, curated email alerts, award-winning mobile
apps, and one of the most sophisticated job search algorithms
in the space.

Find us on:
52
Methodology, Sources, and References

To research this report, we relied on Startup Genome’s propri- Below is a description of the main datasets that make up this data ●● This qualitative research effort includes:
etary database of almost half a million companies, our survey science infrastructure: ●● Reviewing hundreds of research reports, media articles, and
data covering over 12,000 ecosystems leaders across the globe, books
and several 1-on-1 interviews with entrepreneurs and ecosystem Startup Genome proprietary data:
●● Interviewing over 100 experts on the topic, for both sub-sec-
leaders in Frankfurt. Moreover, LaunchVic brought their extensive
tors and ecosystems
and deep knowledge of the Victoria and Frankfurt community to ●● Interview of 100+ Experts
the writing of this report. ●● 2017-2018 Startup Ecosystem Survey with more than 10,000
Gathering qualitative insights and free form text from an over
participants
We also relied on our Global Startup Ecosystem Report 2017 10,000 founders and startup executives surveyed directly by
●● CrunchBase: global dataset on funding, exits, and locations of Startup Genome
and the methods there. In the following pages, we cover meth-
startups and investors
odology and data sources for key elements of the Global Startup
Ecosystem Report and the research done exclusively with a focus ●● Orb Intelligence: global dataset on company information We use the knowledge gathered from this qualitative research
in Frankfurt. For the complete methodology, data sources, and ●● Dealroom: global dataset on funding, exits, and locations of effort to inform trends described on the report, review the meth-
references in our Global Startup Ecosystem Report 2017, please startups and investors odology framework, and identify nuanced and forward-looking
see: startupgenome.com/report2017. For an overview of our insights that the data alone could not give.
●● Local partners (accelerators, incubators, startup hubs, inves-
Science of Ecosystem Assessment, see the 2018 Global Startup
tors):
Ecosystem Report.
●● list of startups
Key Terms and Definitions
The Startup Genome quantitative data infrastructure includes ●● list of local exits and funding events
data on over 1 million companies, nearly 100 ecosystems, and
survey data from more than 10,000 startup executives across the In addition to quantifying several aspects of startup sub-sectors Startup
globe—the Voice of Entrepreneurs. across the world, we are undertaking a major research effort to Steve Blank defines a startup as a “temporary organization in
qualitatively understand each and every of the sub-sectors and search for a repeatable and scalable business model”. We use
ecosystems we cover on this report. this definition to look across sectors and sub-sectors, including
software, hardware, health, energy, and others.

Find us on:
53
Scaleup Resource Attraction: captures the extent to which entrepreneurs to reach customers outside their country and the immediate
Defined as a startup that reaches a valuation of at least US$50 move to an ecosystem to start a startup and how many startups continental region.
million within 10 years. relocate to an ecosystem. Increasing Resource Attraction at the
national and global levels is an important determinant of an eco- Global Connectedness: How well founders are meaningfully
Ecosystem system’s growth rate. connected to founders in other ecosystems, with a focus on the
world’s top seven ecosystems.
Defined around the concept of a shared pool of resources, gen- Startup Leakage: measures the percentage of startups that, in
erally located within a 60 mile (100 km) radius around a center our global survey, reported leaving a certain ecosystem. A low Resource Attraction: The gravitational pull of an ecosystem in
point in a given region, with a few exceptions based on local reality. score on Startup Leakage indicates that few startups have left drawing in entrepreneurs and startups from elsewhere.
that ecosystem in favor of another one.
Startup Experience: The depth and diversity of the pool of prior
Startup Sub-Sector Triggers: Triggers are the externally impressive exits and high startup experience in an ecosystem.
Defined as a subset of startup ecosystems along the main innova- startup valuations that spark a sharp increase in Resource Attrac-
tion sectors: Tech/ICT, Life Sciences, and Cleantech. Because some tion, driving the growth of an ecosystem and its evolution to the Talent: Measures the accessibility, quality, and cost of software
are horizontal in nature, we stayed away from using the term “ver- next phase of the Lifecycle. engineering expertise.
tical”. These sub-sectors are areas in which startups are applying
innovation and carving out new areas of economic activity often Founder: success factors related to the startup founder, under his
Success Factor Model
distinct from—although sometimes related to—legacy industries or her control, or internal to the startup as opposed to external
(e.g. AI, which doesn’t have a well-defined related industry, and Our principal analytical tool, this measures different dimensions (a function of the ecosystem)
FinTech, with the related Financial Industry). of what supports the performance of local startups. We look at
10 Factors: one measuring actual performance with 9 Success ●● Founder Mindset: Attitudes and preferences that align
Factors associated with performance, each comprised of sub-fac- with success. See related ecosystem science article for
Ecosystem Lifecycle Factors tors and metrics. more.
Combined with some of measures from our Success Factor Model, ●● Founders with Entrepreneur Mindset: startup found-
Ecosystem Lifecycle Factors measure different dimensions of a Performance: A combination of leading, lagging, and current in- ers that closely matched the validated profile of suc-
startup ecosystem. These allows us to determine the phase of dicators that capture economic outcomes in a startup ecosystem. cessful early-stage entrepreneurs along five attitudes
development in which the ecosystem is in -- Activation, Global- tested: Initiation, Reflection + Patience, Breadth, Depth,
ization, Expansion, or Integration. Funding: The level and growth of early-stage funding, looking at and Structure.
both access and quality.
●● Founders with Business Builder Mindset: startup
founders that closely matched the profile of successful
Market Reach: How well startups in a given ecosystem are able
business builders (late-stage entrepreneurs) along the

Find us on:
54
five attitudes Tested. ●● Sense of Community Index: a sub-factor of Local Connect- coverage on each sub-sector, please see their respective sections
●● Founder DNA: The background, experience, ambition, and edness capturing the degree to which founders informally in the report.
motivation of local founders. receive help from investors, experts, and fellow founders.
●● Founder Know-How: A multi-variable assessment of ●● Number of Relationships Between Founders: number
Advertising Tech (Adtech)
founder knowledge of key startup methodologies such as of quality relationships between local founders, where they
know each other and can call upon the other for help “this Advertising Tech captures different types of analytics and digital
Steve Blank’s Customer Development and Eric Ries’ Lean
week”. tools used in the context of advertising and marketing. Extensive
Startup.
and complex systems are used to direct, convey, or monitor ad-
●● Theoretical Know-How: a sub-factor of Founder Know- ●● Collision Index: a sub-factor of Local Connectedness cap-
vertising to target audiences of any size and scale.
How capturing theoretical knowledge of key startup turing the number of events founders recently participated
methodologies. in and the number of collisions with startup community
●● Practical Know-How: a sub-factor of Founder Know- participants. Advanced Manufacturing & Robotics
How measuring a behavior demonstrating knowledge Advanced Manufacturing involves smart technology to improve
of key startup methodologies was put into practice. Organizations: Measurement of the quantity and quality of or-
traditional manufacturing of products and/or processes. Robotics
●● Founder Go-Global Strategy: measures whether a startup ganizations, programs, events, and other activities is being con-
is the science and technology of robots, their design, manufacture,
is going global from the outset or first targets its local ducted with support from the Kauffman Foundation.
and application.
market, and whether its customer acquisition team is
located, targeted, and skilled to succeed.
●● Founder with High Ambition: Founders who expressed Sector and Sub-Sector Definitions Agriculture Tech (Agtech)
all of the following attributes: Total Addressable Market of Agriculture Tech captures the use of technology in agriculture,
$30 billion USD or more; developing a globally-new, or one Below are our definition for each startup sub-sector analyzed horticulture, and aquaculture with the aim of improving yield,
of the globally-leading or niche products; and the mission here. Note that sub-sectors are not mutually exclusive nor com- efficiency, and profitability through information monitoring and
to change the world, get rich or create a great product. prehensive—some startups are in sub-sectors we did not con- analysis of weather, pests, and soil and air temperature.
●● Founders with Experience in Sub-Sector: founders who sider.
Artificial Intelligence, Big Data & Analytics AI, Big Data & Analytics
considered their graduate or postgraduate degree to be
In addition, at least from patents, the data shows a clear tech refers to an area of technology devoted to extracting meaning
directly relevant to their startup.
convergence. Technology like AI software are increasingly inter- from large sets of raw data, e.g. often including simulations of
related, and we expect a similar convergence over time across intelligent behavior in computers.
Local Connectedness: A multi-variable assessment of the local
sub-sectors.1
community, including sense of community, relationships, and
collisions between founders, investors, and experts. Blockchain
For more detail, including in our machine learning classification
of sub-sectors, please see our Methodology section. For more

1 European Patent Office, 2017.
Find us on:
55
Blockchain is a decentralized data storage method secured by Education Tech (Edtech) Performance
cryptography. Cryptocurrencies are one of many innovations Education Technology refers to an area of technology devoted Startup Output measures the estimated number of startups in an
utilizing the blockchain. Companies building their product/archi- to the development and application of tools (including software, ecosystem. Generally speaking, ecosystems need higher Startup
tecture on top of this decentralized and encrypted technology hardware, and processes) intended to redesign traditional prod- Output (more startups) in order to enjoy faster ecosystem growth
are defined as blockchain companies. ucts and services in education. and higher performance.
Cleantech We calculate an Exit Value Growth Index by capturing the value

Fintech
of exits over a two-year period in order to smooth uctuations.
Cleantech is comprised of sustainable solutions in the fields of Fintech aims to improve existing processes, products, and services Rapidly growing exit values capture attention from founders and
Energy, Water, Transportation, Agriculture, and Manufacturing in the Financial Services industry (including insurance) via software investors from around the world and establish a track record of
that including advanced materials, smart grids, water treatment, and modern technology. success.
efficient energy storage, and distributed energy systems.
Gaming Market Reach

Consumer Electronics or Home Electronics (includes Wear-
Gaming involves the development, marketing, and monetization To measure Global Market Reach in an ecosystem, we look at
ables, Smart Devices)
of video games and gambling machines, as well as associated the average percentage of customers outside the country or
Consumer Electronics or Home Electronics are electronic or digital services. continent.
equipment intended for everyday use, including smart devices
used for entertainment, communications, and home-office activ-
Startups in Europe, for example, may sell to foreign customers in
ities as well as other wearables. Health and Life Sciences
other European countries, but ‘Global Market Reach - Out of Conti-
Health and Life Sciences uses digital technology to maintain or nent’ captures how extensively they sell outside of Europe. Higher
improve health via the diagnosis, treatment, and prevention of Global Market Reach means faster growth rates for startups.
Cybersecurity
disease, illness, and injuries.
Cybersecurity is the body of technologies, processes, and practic-
Global Connectedness quantifies quality relationships that exist
es designed to protect networks, computers, programs, and data
between startup leaders. We focus especially on connections with
from attack, damage, or unauthorized access.
Metrics Covered on this Report, by the world’s top ecosystems, the ecosystems that are at the nexus
of the global fabric of knowledge, ideas, people and organizations.
Success Factor Global Connectedness brings Global Know-How into an ecosystem
and leads to greater Global Market Reach.
Travel Connections show how many relationships of found-

Find us on:
56
ers were formed by traveling to top ecosystems, whereas Local Startup Leakage measures the percentage of startups that, in resources to become globally competitive in these Sub-Sectors
Meeting shows how many people from other ecosystems made our global survey, reported leaving a certain ecosystem. A low and drive ecosystem growth.
connections with startups in a given ecosystem. The latter is a score on Startup Leakage indicates that few startups have left
good indicator of the strength of conferences and events in the that ecosystem in favor of another one. The Startup Sub-Sector Strengths Analysis focuses on the follow-
ecosystem attracting other people to come and visit. ing aspects:
Startup Experience
Globally-Leading Product metric reports the percentage of start-
Startup Experience captures the pool of experience startups Startup Sub-Sector Analysis
ups in an ecosystem who say they are developing a completely
new product for global markets. This is an indicator of Founder can draw on in an ecosystem. We measure it by looking at several Assessment of the startups that belong to one of the Startup
Ambition, and is influenced by the degree of Global Connected- metrics indicating the experience in and around the founding Sub-Sectors with a special focus on their performance and overall
ness in an ecosystem, i.e. to what extent startups tap into the team and scaling experience in the ecosystem. attractiveness.
global knowledge allowing them to develop a new business model
or technology–and know it actually is new. Our measure of Experienced Growth Employees captures how
Existing Market & Legacy Industry Analysis
many employees working in customer acquisition (growth) roles
Our metric on Targeting Global Market First reports the per- at startups have at least two years of prior experience working Identification and assessment of existing markets and potential
centage of startups in an ecosystem who are going global imme- in startups. legacy industries that are related to the startup sub-sector.
diately or targetting the United States or the United Kingdom,
markets where, more than anywhere else, startups from all over
Talent & Knowledge Analysis
the world compete. This is an indication of Founder Know-How Startup Sub-Sector Performance As- Assessment of university infrastructure and output that feeds
in terms of Going Global and Customer Development strategy.
sessment talent and expertise demand of the sub-sector.
Resource Attraction The purpose of the Startup Sub-Sector Performance Assessment

Resource Attraction captures the extent to which entrepreneurs is, first, to identify local Startup Sub-Sectors that already perform Startup Sub-Sector Analysis
move to an ecosystem to start a startup and how many startups above average and, second, to identify locational advantages that
relocate to an ecosystem. Increasing Resource Attraction at the support certain Sub-Sectors or may translate into internationally We measure the Performance and the relative the different Startup
national and global levels is an important determinant of an eco- competitive Sub-Sector Performance in future. For each sub-sec- Sub-Sectors (e.g. Fintech, Cybersecurity, Biotech) on a Global Level
system’s growth rate. tor, the overarching goal of the analysis is to identify patterns that as well as on an Ecosystem Level. The Sub-Sector Performance
make for relative success in the global comparison. Ultimately Analysis is based on our Startup Ecosystem Assessment Model
we want to inform the development of Sub-Sector strategies and examines the following factors, qualitatively and quantitatively.
prioritizing one to three attractive Sub-Sectors, focusing enough Due to data availability, some factors can only be evaluated at the
global level.
Find us on:
57
Startup Output ●● Events with focus on the Sub-Sector ●● Identification of the relevant legacy industries that are linked
●● Estimate of the number of startups that are active in the ●● VCs with formal focus on the Sub-Sector to the Sub-Sector
Sub-Sector ●● Analysis of the market size, market growth (e.g. Annual Revenue,
●● Startup Output Growth over the last 5 years People Employed, etc.)
The long-term goal is to identify Local Industry Strengths and to
Exits, Unicorns & IPOs Existing Market & Legacy Industry find out if and how they translate into higher Startup Sub-Sec-
●● Number of all Startup Exits in the Sub-Sector & Exit Volume Analysis tor Performance.
●● Sub-Sector Unicorns in Existence and their Valuations

●● Analysis of Startups per Sub-Sector that went public In order to get an idea of the potential of the different sub-sec-
tors we analyze the Market Size of related traditional industries. Talent & Knowledge Analysis
●● Growth Rates for all of the above over the last 5 years
Example: For Adtech we have looked at the market for tradi-
tional Advertising & Marketing. We apply our validated Talent sub-factors (Access, Cost, and
Funding
Quality of Talent) to the different Startup Sub-Sectors. Addi-
●● Assessment of Total Funding per Sub-Sector: Number of These are evaluated quantitatively and qualitatively, as appli- tionally, we are going to put a special focus on Universities and
Funding Events & Total Funding Amount cable. qualitatively and quantitatively. Due to data availability, Colleges, looking at local concentration of specific degrees or
●● Examination of High Growth Startup Development (Series B+) some factors can only be evaluated at the global level. research focuses, qualitatively and quantitatively. Due to data
availability, some factors can only be evaluated at the global
●● Growth Rates for all of the above over the last 5 years
level.
Related Market Size
Sub-Sector Founder Dynamics & DNA in relation to other
Sub-Sectors: ●● Identification of the relevant market segments that are linked
to the sub-sector Universities & Colleges
●● Founder Ambition, Go-Global Strategy & Global Connected-
●● Analysis of the market size,market growth and future predic- ●● Specialized Degrees
ness of Sub-Sector Founders
tions (e.g. based on Market Cap, Sum of Sales, etc.) ●● University Rankings
●● Prior legacy industry expertise of founders
●● University Graduates Analysis
Local Support for the Sub-Sector Furthermore we are identifying and analyzing Legacy Industries
that are related to speci c Startup Sub-Sectors (e.g. Financial
●● Accelerators with formal focus on the Sub-Sector
Services Industry for Fintech).
Related Legacy Industry

Find us on:
●● Research, Patents & Academic Citations a. Predictive machine learning algorithms based on natural We also relied on our Global Startup Ecosystem Report 2017
●● Academic Awards & Nobel Prizes language processing of company description texts provid- and the methods there. In the following pages, we cover
ed by our data partners methodology and data sources for key elements of the Global
b. Manual review of false positives and false negatives to Startup Ecosystem Report and the research done exclusive-
improve labels for next iteration ly with a focus in Frankfurt. For the complete methodology,
data sources, and references in our Global Startup Ecosystem
Startup Classification Methodology This semi-automated and iterative approach allowed us to
move fast while still achieving high accuracy scores. More spe-
Report 2017, please see: startupgenome.com/report2017. For
an overview of our Science of Ecosystem Assessment, see the
cifically, we required every predictive model to meet the follow-
A foundation of this report is the classification of companies 2018 Global Startup Ecosytem Report.
ing criteria:
into the Sub-Sectors covered by our research. To build this
foundation, we relied heavily on a combination of top-down and
●● Recall,2 Precision,3 and F1 Score:4 0.85 or higher;
bottom-up clustering techniques and state-of-the-art machine
●● ROC - AUC Score:5 0.9 or higher.
Data Sources and References
learning algorithms.
We have focused our efforts on collecting measurable and veri-
In a nutshell, we followed a 4-step approach that led to the clas- Additionally, to ensure the high quality of our classification fiable information from startups and investors, local ecosystem
sification of companies as it is used throughout this report: process, we are going to add a manual review process following partners, and third-party sources..
the 80-20 rule to make sure the largest and most successful
1. Clustering of tens of thousands of companies based on tags companies.
provided by our main data partners Crunchbase, Dealroom Primary Data Sources
and Orb Intelligence To research this report, we relied on Startup Genome’s propri-
2. Identification of clusters of sufficiently large size within the etary database of almost half a million companies, our survey In alphabetical order
innovation economy data covering over 12,000 ecosystems leaders across the globe,
Startup Compass Inc. (2015). The Startup Ecosystem Report 2015
and several 1-on-1 interviews with entrepreneurs and ecosys-
3. Improved labelling of companies based on company descrip- Survey [Database].
tem leaders in Frankfurt. Moreover, LaunchVic brought their
tions to reduce tagging errors (e.g. tags often included mis- CrunchBase (2017-2018). Crunchbase.com Database [Database]
extensive and deep knowledge of the Victoria and Melbourne
leading buzzwords)
community to the writing of this report. Dealroom.co BV. (2017-2018). Dealroom.co Database [Database]
a. Manual labelling of a random selection of 10k+ companies
Orb Intelligence Inc. (2017-2018). orb-intelligence.com Database
b. Automatic labelling of companies based on frequent and 2 Recall: proportion of actual positive values found by the classifier.
[Database]
3 Precision: proportion of positive predictions that were indeed positive.
useful tags within each of the clusters
4 F1 Score: Harmonic mean between Precision and Recall. Startup Genome LLC (2017). StartupGenome.com Database [Da-
4. Iterative sub-sector classification until our accuracy standards 5 ROC-AUC Score: Area under the ROC; score contrasting true positives v. false posi- tabase]
were met (see below for standards) tives, from 0.5 (random model) to 1 (perfect model).
59
Startup Genome LLC (2018). StartupGenome.com Database [Da- course-start-ups-right-heart-frankfurt/. pub_wissensatlas2018.pdf

tabase] Play, Plug and. “Plug and Play and TechQuartier Announce The
First Five Corporate Partners to Join The Fintech Europe Inno-
vation Platform in Frankfurt.” PR Newswire: News Distribution,
References and Other Data Targeting and Monitoring, PRNewswire, 23 Apr. 2018, www.
prnewswire.com/news-releases/plug-and-play-and-techquart-
“Angebotsübersicht Des Startup Hochschulnetzes FrankfurtRhe- ier-announce-the-first-five-corporate-partners-to-join-the-
inMain.” Goethe Unibator, goetheunibator.de/netzwerk/ange- fintech-europe-innovation-platform-in-frankfurt-300634143.
botsuebersicht-startup-hochschulnetz-frm/. html.
“Fast Growth in Sleep – How Frankfurt-Based Bettzeit Grew to a “Startup Hochschulnetz FrankfurtRheinMain.” Rhein-Main Start-
Leading Mattress Player.” Rhein-Main Startups, 29 Nov. 2017, ups, 2 Mar. 2018, rhein-main-startups.com/hochschulnetz/.
rhein-main-startups.com/2017/11/29/fast-growth-in-sleep- “Startup Hochschulnetz FrankfurtRheinMain.” Rhein-Main Start-
how-frankfurt-based-bettzeit-grew-to-a-leading-mattress-play- ups, 2 Mar. 2018, rhein-main-startups.com/hochschulnetz/.
er/?cn-reloaded=1. “Starting Afresh: How entrepreneurship is transforming the
“FastBill: Millionen-Finanzierung Für Die Finanzsoftware.” WiWo lives of resettled refugees,” Centre for Entrepreneurs,
Gründer, 2 May 2017, gruender.wiwo.de/fastbill-millionen-fi- March 2018, at https://centreforentrepreneurs.org/cfe-re-
nanzierung-fuer-die-finanzsoftware/. search/starting-afresh-how-entrepreneurship-is-transform-
Opp, David. “EY Start-up Academy - Successful Round of Financ- ing-the-lives-of-resettled-refugees/.
ing for Frankfurt-Based Start-Up.” Frankfurt Main Finance, TechQuartier. “MMI SportsTech Kick-Off! – TechQuartier – Medium.”
David Opp Https://Frankfurt-Main-Finance.com/Wp-Content/ Medium, Augmenting Humanity, 17 Apr. 2018, medium.com/@
Uploads/2016/02/Frankfurt-Main-Finance-Logo.png, 14 Dec. TechQuartier/mmi-sportstech-kick-off-cb023914a705.
2017, frankfurt-main-finance.com/en/ey-start-up-academy- TechQuartier. “A Masterplan for the Startup Region of Frankfurt
successful-round-of-financing-for-frankfurt-based-start-up/. Rhein-Main.” Medium, Augmenting Humanity, 15 Feb. 2018,
Opp, David. “The EY Start-up Academy: a Crash Course for Start- medium.com/@TechQuartier/a-masterplan-for-the-startup-
Ups Right in the Heart of Frankfurt.” Frankfurt Main Finance, region-of-frankfurt-rhein-main-a8b2f4b5e24b.
David Opp Https://Frankfurt-Main-Finance.com/Wp-Content/ “UX Accelerator, Usability and User Experience.” TechQuartier,
Uploads/2016/02/Frankfurt-Main-Finance-Logo.png, 11 Aug. techquartier.com/activities/acceleration/ux-accelerator/.
2017, frankfurt-main-finance.com/en/ey-start-academy-crash-
“Wissensatlas 2018” Initiative Wissensregion FrankfurtRheinMain
(WiR), https://www.frankfurt-main.ihk.de/images/broschueren/

Find us on:
60
Copyright © 2018 Startup Genome LLC (www.startupgenome.com), all rights reserved.
You agree not to reproduce nor distribute the report, either by email, website download, or any other electronic or physical means without the prior written authorization of
Startup Genome. This material has been prepared for general informational purposes only and is not intended to be relied upon as professional advice.
June 12th, 2018. Version 1.2

Find us on:

Frankfurt Startup Ecosystem Report v1.2 - Color PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Frankfurt Startup Ecosystem Report v1.2 - Color PDF

Uploaded by

Copyright:

Available Formats

1

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

About Startup Genome

About Our Partners On This Report

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

3 About Our Partners On 14 Ecosystem Overview 52 Methodology, Sources, and

7 Global Overview and DNA 25 Frankfurt 360 Ecosystem

38 Key Findings and Policy Directions

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

finance industry and

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Global Overview and DNA of Scaleups

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Approach Scaleup Myth Scaleup Myth

Definition of Scaleups: startups that reach a valuation of at least differences. 20%

When we look within countries, however, we see considerable

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Scaleup Firms as Share of Startup Output

than-the-best startups in ecosystems like Toronto. More scaleups

# of $ Billion Exits as Share of

Scaleups Across the Ecosystem

as many, in fact, over the last decade—and nearly as many as 0.01%

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

creation of even more scaleups. Expansion phase ecosystems

Difference of Average Scaleup

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Lessons Learned for Smaller

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Frankfurt Ecosystem DNA

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Regions without traditionally tech-based economies can still

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

and NETS Group. The program aims to bring together startups

“Frankfurt is a major financial capital and on track to also become

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Share of received VC investment

13%: Frankfurt has the highest concentration (tied with 10%

enables them to cancel unwanted contracts with a few clicks and

provides them with saving tips.4 The company was founded in 8%

5 Citation: “The Growth and Decline of Startup Sub-Sectors,” GSER 2018.

Share of received VC investment

software. Its proprietary AI platform is called HIRO (Human Intel- 10%

computer scientist Chris Boos, and is based in Frankfurt and 6%

es that generates intelligence and insights across the different

Insurance sector. The company was founded in 2011 and is head- 4%

quartered in Frankfurt with offices in Pune, India, and Hoboken, 2%

process. The software is reading the electronic identity in a gov- 1.50%

ernment-issued ID card via a smartphone’s NFC interface. It then

Frankfurt 360 Ecosystem Assessment

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

Lifecycle: Frankfurt several important gaps to address, particularly related to

as other dimensions of the Frank-

Size & Resources

Copyright © 2018 Startup Genome LLC. All Rights Reserved.

to their curricula. National newspapers now regularly report on

Percent of Globalization Average

should be the objective of local leaders. These phases are Activa-

Number of Coworking Spaces 114 24 170